Researching Your Financial Investment Advisor

Placing your money into the hands of a financial investment advisor is an act of trust. It can be a long-lasting relationship that may determine the future of your financial stability. Considering the importance of such an endeavor, it is vital to know whom you will be potentially working with. The Federal government requires all financial advisors, and the firms they work for, to provide important information to the public. They must also be registered, or licensed, where they practice. Their registration and license information can give you more insight into their background.

Verify License To Practice

When you begin to research a potential financial investment advisor, start by checking their license. The first place to look is the Security and Exchange Commission. Their job is to serve and protect investors. Perform a quick search to see if your potential investment advisor is registered. Any investment advisor who handles more than 25 million dollars is required to register with the State Securities Agency. Their information can be searched in the state where their business is located. Avoid non-licensed investment advisors because they cannot prove their track records and may be practicing under false pretenses as well. Any investor practicing without a license may not follow the rules of investing and may cause you to lose sizeable amounts of money.

Research Investment Record

Knowing the background of the financial investment advisor you are going to work with is very important. It helps to get a clear picture of their character. Researching their previous record will show you disputes, employment history and any disciplinary actions that have ever been taken. This information can be searched by visiting the Investment advisor public disclosure website. Having this information will allow you to make an informed decision. The record will also identify past problems with the investment advisor and previous investors. This information is valuable because you can see how your potential investment advisor handled the concerns of their investors. The record will show common complaints that were reported by previous investors. It may include misrepresentation complaints, unsuitability complaints or complaints related to cold calling.

Request Public Forms

Public forms can be received on any financial investment advisor who is licensed and registered. There is the two-part registration form called the ADV form that is available to public. The first part of the form gives information about any past problems with previous clients, or regulators. The second part shows any fees they charge, a listing of services they may provide as well the types of investment strategies they may practice. You may be able to request this form directly from the investment advisor. If they are legitimate, they should not have any problems giving you a copy. If you would rather request your own copy, you can visit the Security and Exchange website. Having a copy of the ADV form will give you an opportunity to ask important questions and find out more about your investor.

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