Before working with a broker or other financial professional, the first thing you should do is make sure that person is licensed to sell you an investment. You can do this by using BrokerCheck®, a free online tool from the Financial Industry Regulatory Authority (FINRA).
Make sure the investment professional is licensed either with FINRA as a registered representative, or with the Securities and Exchange Commission or a state securities regulator as a registered investment adviser. You can look up a specific firm or investment professional, or you can search by ZIP code to find professionals or firms in your area.
When you look up an individual, you can find:
When you search for a firm, you can find:
If an individual or firm doesn’t have a history of reported problems, BrokerCheck can help you detect potential red flags. For example, you can see if an individual broker has switched firms frequently over a short period of time, or if the firm has changed its name often.
In addition to using BrokerCheck, it’s a good idea to check with your state securities regulator, local consumer groups, or others who have business relationships with a particular financial professional before deciding to work with him or her.