When Should A Realtor Be Registered With The Sec

Aug. 1, 2007

Ask Questions" brochure in Spanish

Questions You Should Ask Almost Your Investments ...
and What To Practice If You Run Into Problems

That's the best communication nosotros can give you about how to invest wisely. We encounter too many investors who might take avoided trouble and losses if they had asked basic questions from the start.

We encourage you to thoroughly evaluate the background of whatever financial professional with whom you intend to practice business—earlier you hand over your hard-earned cash.

Investor Tip

Which financial professional you select is very of import for several reasons. You'll want to investigate thoroughly before doing business with a financial professional or firm that has a history of complaints or bug with regulators. Besides, y'all should know that if your financial professional or his or her business firm goes out of business organisation or declares bankruptcy, yous might not be able to recover your money—even if an arbitrator or a court rules in your favor.

It doesn't matter if you are a beginner or accept been investing for many years, it'south never too early or too late to start request questions. It's almost impossible to inquire a dumb question about how you are investing your coin. Don't experience intimidated. Recollect, it's your coin at stake. Y'all are paying for the help of a financial professional.

A good fiscal professional will welcome your questions, no matter how bones. Financial professionals know that an educated client is an nugget, non a liability. They would rather reply your questions earlier you invest, than face up your anger and confusion later.

In this brochure, y'all'll find some questions that you lot should ask about investment products, the people who sell those products, and the people who provide investment communication to you. Nosotros've as well included some tips on how to monitor your investments and handle whatever issues.

Go along this brochure on hand when because an investment and employ information technology by asking the correct questions before you purchase. Accept a pen and slice of paper ready to take notes on the answers. They can come in handy if there is a dispute later on about what was said during the transaction. Taking notes also sends a signal to your financial professional person: I'm a smart and serious investor who wants to know more well-nigh the risks and rewards of investing.

Questions Almost Products:

Is this investment product registered with the SEC and my state securities agency?
Does this investment match my investment goals? Why is this investment suitable for me?
How will this investment make money? (Dividends? Interest? Capital gains?) Specifically, what must happen for this investment to increment in value? (For example, increment in involvement rates, existent manor values, or market share?)
What are the total fees to purchase, maintain, and sell this investment? Are there means that I can reduce or avoid some of the fees that I'll pay, such equally purchasing the investment directly? Later on all the fees are paid, how much does this investment have to increase in value before I break fifty-fifty?
How liquid is this investment? How easy would information technology be to sell if I needed my money correct away?
What are the specific risks associated with this investment? What is the maximum I could lose? (For example, what will be the effect of changing interest rates, economic recession, high competition, or stock market ups and downs?)
How long has the company been in concern? Is its management experienced? Has direction been successful in the by? Accept they ever made money for investors before?
Is the company making coin? How are they doing compared to their competitors?
Where can I go more information nigh this investment? Tin can I become the latest reports filed by the visitor with the SEC: a prospectus or offer circular, or the latest annual study and financial statements?

For mutual funds:

How has this fund performed over the long run? Where tin I get an independent evaluation of this fund?
What specific risks are associated with this fund?
What type of securities does the fund hold? How ofttimes does the portfolio change?
Does this mutual fund invest in whatever type of securities that could crusade the value to go upwards or downwardly rapidly in a curt period of time? (For example, derivatives?)
How does the fund perform compared to other funds of the same type or to an index of the same blazon of investment?
How much will the fund accuse me when I buy shares? What ongoing fees are charged? How much will the fund accuse me when I sell shares?
Is the fund portable? If I move my assets to another house, will I exist able to continue holding the fund or volition I need to liquidate information technology?

Questions Nigh The People Who Sell Investments or Provide Investment Advice:

Are yous registered with our land securities regulator? Have you lot always been disciplined by the SEC, a state regulator, or other organization (such as NASD or one of the stock exchanges)?

Investor Tip - Check Out Your Financial Professional

You can verify your broker's disciplinary history by checking the Central Registration Depository (CRD). Either your state securities regulator or NASD tin provide you with CRD data. Your state securities regulator may requite y'all more data from the CRD than NASD, particularly when information technology comes to investor complaints, so you may want to cheque with them get-go. You'll find contact information for your land securities regulator on the website of the North American Securities Administrators Association. To contact FINRA, visit FINRA's BrokerCheck website, or call them toll-costless at (800)289-9999.

Yous can find out about investment directorate and whether they are properly registered past reading their registration forms, called the "Course ADV." You can view an adviser's almost contempo Form ADV online by visiting the Investment Adviser Public Disclosure (IAPD) website. At present, the IAPD database contains Forms ADV only for investment adviser firms that annals electronically using the Investment Adviser Registration Depository. You can besides get copies of Form ADV for private directorate and firms from the investment adviser, your state securities regulator, or the SEC, depending on the size of the adviser.

How long has your firm been in business organisation? How many mediation awards take been filed against your firm?
What training and feel exercise you accept? How long have you been in the business organisation? What other firms accept you been registered with? What is the status of those firms today?
Have you personally been involved in any arbitration cases? What happened?
What is your investment philosophy?
Describe your typical customer. Tin can you provide me with some names and phone numbers of your long term clients?
How do you get paid? By committee? Amount of assets you manage? Another method?
Exercise I have any choices on how to pay you? Should I pay you past the transaction? Or a flat fee regardless of how many transactions I have?
Do you make more than if I buy this stock (or bail, or mutual fund) rather than another? If you weren't making extra money, would your recommendation be the same?
Are you participating in a sales contest? Is this purchase actually in my best interest, or are yous trying to win a prize?
You've told me what it costs me to buy this stock (or bond, or common fund); how much will I receive if I sell it today?
Where do y'all send my social club to be executed? Can we get a improve price if we send it to some other market?
If your financial professional changes firms, ask: Did they pay you to change firms? Exercise you get anything for bringing me forth?

Questions About the Progress of Your Investments:

How oftentimes do I get statements? Do I sympathize what the statement tells me?
Is the return on my investment meeting my expectations and goals? Is this investment performing equally I was led to believe?
How much money will I get dorsum if I sell my investment today?
How much am I paying in commission or fees?
Have my goals inverse? If so, are my investments withal suitable?
What criteria will I utilize to decide when to sell?

How to Handle Problems:

Act promptly! Past police, you only have a limited time to accept legal action. Follow these steps to solve your problem:

Talk to your financial professional person and explicate the problem. Where is the fault? Were communications clear? Refer to your notes. What did the financial professional tell you? What practice your notes say?
If your fiscal professional person can't resolve your trouble, then talk to the fiscal professional'southward supervisor (which, for brokers, is oft the house's branch managing director).
If the problem is still not resolved, write to the compliance department at the business firm's main office. Explain your problem clearly, and how you want information technology resolved. Ask the compliance role to respond to you within thirty days. If you're even so non satisfied:
Send us your complaint by using our online complaint form or y'all tin reach united states equally follows:
Securities and Commutation Committee
Office of Investor Education and Advocacy
100 F Street, N.E.
Washington, D.C. 20549-0213

At the SEC, we will research your complaint, contact the firm or person you lot accept complained near and ask them to respond to your specific complaint or question. Sometimes our intervention yields a satisfactory effect. If these steps don't work, y'all may need to take legal activity on your own. Nosotros tin send y'all information on mediation and arbitration, and suggest how to locate a lawyer if you lot need one.

Investor Tip

When y'all ask these questions, write downwardly the answers you receive and what you lot decided to do. If something goes wrong, your notes can assist to establish what was said. Permit your fiscal professional know yous're taking notes. They'll know yous're a serious investor and may tell y'all more. Use our course for taking notes when you speak to your financial professional person.

For more than information on how to invest wisely, ask for our publications:
Invest Wisely: Advice From Your Securities Industry Regulators, Protect Your Money: Check Out Brokers and Investment Directorate, and Invest Wisely: An Introduction to Mutual Funds. You can also get other SEC publications online or by calling our price-free publications line at (800) SEC-0330.

We have provided this information as a service to investors. It is neither a legal interpretation nor a statement of SEC policy. If you have questions concerning the meaning or application of a particular law or rule, please consult with an attorney who specializes in securities law.