6 Tips for Working with Your Investment Professional

Gerri Walsh
July 30, 2013
6 Tips for Working with Your Investment Professional

Talk to your investment professional regularly. ©iStockphoto.com/Ridofranz

Few relationships are as important as the one you cultivate with your investment professional. These tips can help ensure it's a productive one.

1. Check licenses. Use FINRA BrokerCheck to verify if an investment professional is licensed as a broker by FINRA, or registered with the SEC or a state securities regulator as an investment adviser.

2. Set your investment goals and risk tolerance. Be clear about your investment goals and honest about the amount of risk you're comfortable taking.

3. Research every investment. Ask questions about any potential investment before you make it. Request a prospectus and other information that explains the investment, and read these materials carefully. Discuss potential risks and rewards. Don't be afraid to ask, "How can I lose money with this investment?"

4. Discuss fees and other compensation. Fees may include sales commissions or administrative and management charges. They can also include costs associated with the sale or redemption of an investment.

5. Review your account activity. Look at your account statements. Contact your investment professional immediately about any transaction you did not authorize or items you don't understand. Contact the firm's compliance department if you're not satisfied with your investment professional's response.

6. Stay in touch. At least once a year, ask how your investments are doing and if your portfolio needs changes or tune-ups. Let your investment professional know about major changes in your financial situation, risk tolerance or investment goals.

For more information about saving and investing, visit finra.org.

Gerri Walsh is Senior Vice President of Investor Education at the Financial Industry Regulatory Authority (FINRA).

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