5 Tips for Dealing with Your Securities Broker
"Trust, but verify" is a good motto for dealing with the people who help you buy stocks. Here's how savvy investors can help protect themselves.
You are now subscribed
Your newsletter sign-up was successful
Want to add more newsletters?
Delivered daily
Kiplinger Today
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more delivered daily. Smart money moves start here.
Sent five days a week
Kiplinger A Step Ahead
Get practical help to make better financial decisions in your everyday life, from spending to savings on top deals.
Delivered daily
Kiplinger Closing Bell
Get today's biggest financial and investing headlines delivered to your inbox every day the U.S. stock market is open.
Sent twice a week
Kiplinger Adviser Intel
Financial pros across the country share best practices and fresh tactics to preserve and grow your wealth.
Delivered weekly
Kiplinger Tax Tips
Trim your federal and state tax bills with practical tax-planning and tax-cutting strategies.
Sent twice a week
Kiplinger Retirement Tips
Your twice-a-week guide to planning and enjoying a financially secure and richly rewarding retirement
Sent bimonthly.
Kiplinger Adviser Angle
Insights for advisers, wealth managers and other financial professionals.
Sent twice a week
Kiplinger Investing Weekly
Your twice-a-week roundup of promising stocks, funds, companies and industries you should consider, ones you should avoid, and why.
Sent weekly for six weeks
Kiplinger Invest for Retirement
Your step-by-step six-part series on how to invest for retirement, from devising a successful strategy to exactly which investments to choose.
It is no longer sufficient to be a “saver.” Saving money in a bank account is a critical first step to any long-term family financial plan. But after saving sufficient funds for dealing with expenses, both ordinary and unexpected, a long-term financial plan must reach beyond a savings account. Many Americans — now more than ever — have a relationship with a brokerage firm, to buy and sell stocks and other financial securities. Here are some things you should keep in mind.
1. Investigate before you invest.
Almost all brokerage firms and individual brokers are registered with the Financial Industry Regulatory Authority. FINRA is a “self-regulatory organization” under federal securities laws. FINRA operates “Broker Check,” which investors can access at https://brokercheck.finra.org/. This allows you to review the regulatory compliance history of the firm, and the individuals, you are dealing with.
2. Read your paperwork every month.
Take the time to review any changes to your account every month. If you’ve chosen electronic document delivery, log on at least once a month. This has a number of benefits. It compels you to stay abreast of your holdings, and it will alert you to any transaction you do not recognize. Such events are rare but can be very consequential. If you do find a transaction you do not understand, by all means call the brokerage. But … and this is important … if there is an error in your account, make sure to write to your brokerage firm about the error. Should there be any question about the validity of any transaction, you want to be able to say that the transaction was recognized quickly and documented as soon as possible.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
3. Understand your investments.
If you don’t understand an investment, then you shouldn’t be involved in it. Here is an actual investment pitch: “Objectives are achieved through a top-down, bottom-up process that identifies disparities in the economy or securities sectors, creating +/- changes in market perception.” Huh?
4. Understand that no investment is guaranteed.
Unlike bank deposits, investing involves risk. No one can assure you that any one of your investments is foolproof. Indeed, if you are told by any party, be it a brokerage firm, or any other person soliciting your money, that the investment is guaranteed, beware.
5. Make sure your securities are held by an SIPC member brokerage firm.
Brokerage firm failures are rare. However, if for any reason your securities broker cannot return your securities to you, you have certain protections available to you from the Securities Investor Protection Corp. To learn more about SIPC, how you are protected, and the limits of that protection, visit the SIPC website at www.sipc.org. You can check on the website to assure that your brokerage firm is, in fact, a member of SIPC.
-
Quiz: Do You Know How to Avoid the "Medigap Trap?"Quiz Test your basic knowledge of the "Medigap Trap" in our quick quiz.
-
5 Top Tax-Efficient Mutual Funds for Smarter InvestingMutual funds are many things, but "tax-friendly" usually isn't one of them. These are the exceptions.
-
AI Sparks Existential Crisis for Software StocksThe Kiplinger Letter Fears that SaaS subscription software could be rendered obsolete by artificial intelligence make investors jittery.
-
Social Security Break-Even Math Is Helpful, But Don't Let It Dictate When You'll FileYour Social Security break-even age tells you how long you'd need to live for delaying to pay off, but shouldn't be the sole basis for deciding when to claim.
-
I'm an Opportunity Zone Pro: This Is How to Deliver Roth-Like Tax-Free Growth (Without Contribution Limits)Investors who combine Roth IRAs, the gold standard of tax-free savings, with qualified opportunity funds could enjoy decades of tax-free growth.
-
One of the Most Powerful Wealth-Building Moves a Woman Can Make: A Midcareer PivotIf it feels like you can't sustain what you're doing for the next 20 years, it's time for an honest look at what's draining you and what energizes you.
-
I'm a Wealth Adviser Obsessed With Mahjong: Here Are 8 Ways It Can Teach Us How to Manage Our MoneyThis increasingly popular Chinese game can teach us not only how to help manage our money but also how important it is to connect with other people.
-
Looking for a Financial Book That Won't Put Your Young Adult to Sleep? This One Makes 'Cents'"Wealth Your Way" by Cosmo DeStefano offers a highly accessible guide for young adults and their parents on building wealth through simple, consistent habits.
-
Global Uncertainty Has Investors Running Scared: This Is How Advisers Can Reassure ThemHow can advisers reassure clients nervous about their plans in an increasingly complex and rapidly changing world? This conversational framework provides the key.
-
I'm a Real Estate Investing Pro: This Is How to Use 1031 Exchanges to Scale Up Your Real Estate EmpireSmall rental properties can be excellent investments, but you can use 1031 exchanges to transition to commercial real estate for bigger wealth-building.
-
Should You Jump on the Roth Conversion Bandwagon? A Financial Adviser Weighs InRoth conversions are all the rage, but what works well for one household can cause financial strain for another. This is what you should consider before moving ahead.
