The job of a stockbroker, also known as a financial advisor, wealth manager, investment advisor, or private banker, is to invest your money and to help you earn more money in exchange for a fee for the services rendered. In some cases, however, stockbrokers put their own interests above those of their investor clients, which not only violates the duties and trust that such stockbrokers owe their clients but also creates opportunities for investment fraud. There are many ways that your stockbroker can take advantage of you, which is why you should take steps to protect yourself. Here are 7 tips that can help you to avoid being a victim of stockbroker misconduct, including fraud, negligence, breach of fiduciary, or other types of wrongdoing.
Research Your Broker
Before entrusting money to your financial advisor, you should research your financial advisor. Start by searching the internet for his or her name, as well as the name of the company that he or she works for. In addition, you should visit https://brokercheck.finra.org/, a search tool established by the self-regulatory agency, the Financial Industry Regulatory Authority (“FINRA”). FINRA BrokerCheck allows you to look up your broker’s employment history, any regulatory issues, as well as past customer complaints. Finally, ask your broker for the names of at least three of his or her other clients, contact them, and ask them detailed questions about their experience with the broker.
Find Out All the Fees That the Broker will Charge You
Ask your stockbroker for a detailed list of all fees that you will be charged. Research and make sure that the fees are consistent with market rates, if not lower.
Scrutinize Every Investment You Make and Balance the Risk Versus Reward of Every Investment
You should take the time to review and scrutinize each securities offering your stockbroker presents to you. It is essential to evaluate the potential risk and return of every investment. Remember that higher investment returns usually require that you take on meaningful additional risk. Do not be pressured to make immediate decisions and instead take the time to evaluate every offer.
Review Your Account Statements and Monitor your investments
Review every single account statement that you receive. Make sure that you authorized all trades, and that all activity in the accounts makes sense to you. Scrutinize everything and make sure that there are no unauthorized or excessive trading activities in your funds. Ask questions when you are not sure of anything.
Do Not Become a Target
Investors with limited investment experience and knowledge are easy targets for fraudulent stockbrokers. Always be cautious. If you do not understand the investment your stockbroker is recommending to you or the activity in your accounts, be sure to ask questions.
If the investment your stockbroker is recommending to you seems too good to be true, it probably is. Be suspicious of dubious sales pitches and promises by your stockbroker. If you are not comfortable with how your stockbroker is handling your money, move your money to another advisor.
Contact a Securities Lawyer is You Believe Your Accounts Have Been Mismanaged or That you Have been Ripped Off
If you believe that your broker has made unsuitable investment recommendations, that your broker is stealing from you, or that you have inappropriately suffered investment losses due to your stockbroker’s wrongdoing, contact a stockbroker misconduct for investment fraud lawyer immediately.
Victims are always encouraged to consult a stockbroker fraud law firm. An experienced stockbroker fraud lawyer is skilled and knowledgeable on all state and federal laws. In this regard, a professional stockbroker fraud attorney can guide you on the appropriate measures to take that are in your best interests. If you or someone you know needs legal advice regarding fraudulent stockbroker activity, contact us to find out how we can help.