Check-lists for evaluating your Stock Broker

Posted On: October 22, 2011 by Ralph Behr, Esq

Step one is to go to the FINRA website and go to the broker check search for that individual. The broker check will tell you if that stockbroker or financial planner has a complaint history for bad conduct. The second thing to do is what we all consider our gut check. That's simple enough. However if you want checklist here are some things to concern yourself with. Unsuitable investments, risk tolerance, appropriate and realistic financial goals, proper presentation of facts, or the omission of facts. If your stockbroker seems to understand your investment horizon and your risk tolerance then go on to an interview of current clients. My personal opinion is that if you're not in a nationally registered and well-known stock brokerage house you are in the wrong office. Because the majors like Smith Barney, Merrill Lynch, UBS are so well organized and monitored by their compliance departments that you can take that as a good indicator that the financial advisor, stockbroker, is being monitored. Another important indicator is a number of years they been in practice and if they are a solo practitioner or in a group. Groups are better than solos because of redundancy, backup, oversight and depth of staff.