Reject aggressive salespeople. Don’t feel pressured to act quickly. Give yourself time to do your homework. Don’t be afraid to say “no.” Request to be put on the “do not call” list.
Ask questions. Ask what licenses the salesperson has. Get copies of all documents you signed and all information shown to you. Never sign blank or incomplete documents.
Get help. Ask for help from a trusted family member, friend, attorney or CPA. Don’t be embarrassed if you don’t understand the investment. Don’t invest in something that you don’t understand.
Checkout brokers and advisors. Make sure your financial professional is properly licensed and does not have a history of disciplinary issues by using BrokerCheck.
Take notes. Keep a record of all conversations and meetings regarding your investments. If trouble arises, they may come in handy.
Invest within your means. Invest, don’t gamble with money you cannot afford to lose. Avoid illiquid investments that are not publicly traded or investments that impose sales charges if you sell or terminate early.
Put your investment goals in writing. Make sure you know what the stated “investment objective” and “risk tolerance” are for each of your brokerage accounts. Descriptions such as “aggressive” and “speculation” are inappropriate for most investors.
Periodically review your investment goals and update as necessary. As your financial needs change, be sure to let your financial advisor know. Any changes to your investment objectives or risk tolerance should be verified in writing.
Monitor your investments. As the saying goes, “trust, but verify.” Read everything sent to you. If you have questions or suspect a problem, contact the branch manager and keep notes of your discussions. Take action as soon as there is a problem, don’t wait hoping it will go away. See Tip #10.
Report fraud and abuse. Report suspect abuse to the FINRA or your state securities administrator. Obtain a consultation with an experienced securities attorney to learn about your legal options.