The federal or state securities rules require brokers, investment advisers and their companies to be licensed or enrolled in their states.  They are also needed to make essential information public.  Nonetheless, it is up to you to find that information and utilize it in protecting your investments. The good news is this information is easily available on the Internet.


You should first ensure that your broker or investment advisers at have not previously had any disciplinary issues with regulators or their other investor before you decide to invest or pay for investment advice.  You should also find out from them if they have been registered or licensed by the governing body.  Knowing this is important since there will be no way for you to recuperate your money once this unregistered securities brokerage firm becomes bankrupt even if the court rules in your favor.


By searching the Central Registration Depository (CRD) database, you will discover so much about most brokers and the specific companies where they work.  You will also find information about where these financial brokers worked before plus their educational backgrounds.  You can also request your state securities regulator to provide you with more information form the Central Registration Depository as they can give you information especially when it comes to customers claims.



After checking out the registration status and record of your financial firm, you should seek to know whether or not the financial firm at is a member of the Securities Investor Protection Corporation (SIPC).  SIPC does provide customers with protection if the financial firm becomes insolvent.   If you place your money or securities in the hands of a financial company that is a non-SIPC member, then you are not entitled to compensation by SIPC the minute the company goes out of business.


The minute you have settled on a few potential firm it is important to ask them a few questions during the time that you visit them. Some of the questions you should ask are:


o             Explain to me what experience you have in dealing with people, especially in my circumstances?


o             Which institution did you attend and what is your work history?


o             Which products and services do you offer and whether you can recommend any products or services to me?


o             What kind of payment method do you consent to for your services?


o             Have you previously had a disciplinary action taken against you by any government regulator for unethical conduct or have you ever been sued by a client who was not happy with the work you did?  




Once they answer all these questions, you will be able to compare the various financial firms and make a decision on which firm you can comfortably work with. Get more facts about financial advisors at