Articles Tagged with broker

Published on:

FINRAFINRA has released its annual examination priorities letter.  The letter identifies the specific areas FINRA will be focusing on when it conducts examinations of its member brokerage firms in the coming year. According to FINRA, the list is developed based on trends it has seen in the previous year, as well as concerns expressed to FINRA by brokerage firms, investor advocates, and other regulators.  In 2017, FINRA has said it will pay particular attention to the following items, among other things:

High-Risk Brokers

Statistics show that brokers who have committed misconduct against customers are more likely to commit additional violations in the future. FINRA will closely examine the supervisory procedures of brokerage firms who hire or retain brokers with a significant history of prior sales practice complaints. Specifically, FINRA will be checking the adequacy of the firm’s procedures to detect and prevent future misconduct by recidivist brokers.

Published on:

AdobeStock_78797750-300x199It’s your money.  You worked hard to earn it. It’s taken years to save it. Now you need to protect it. Here are some tips to help you make more informed investment choices and protect yourself from investment scams.

  1. Check out the “salesperson.” Just because someone says they have a securities license doesn’t mean it’s true. We recently had a potential client call with a complaint about his “stockbroker” who we quickly discovered hasn’t been licensed since the 1990’s. Checking out purported stockbrokers is easy and free at FINRA’s BrokerCheck site. In addition to information about the securities licenses the individual has, it will show you his or her employment history, if he or she has ever filed for bankruptcy, and any customer complaints or charges by securities regulators.
  1. Don’t believe promises of little or no risk with high returns. The higher the returns, the riskier the investment. Period. 
Published on:

When Selling Municipal Bonds What are the Broker’s Obligations

Many brokers and customers mistakenly believe that municipal bonds are always a “safe” place to be.  The recent debacle in Puerto Rico proves this is not the case.

The law imposes special obligations upon brokers who sell municipal bonds.

Published on:

Brokerage account statements can be lengthy and complicated.  Having a basic idea of what you are looking at, however, can help you spot mistakes, unauthorized activity, and even fraud. Here are the key types of information generally found on monthly account statements and some potential red flags that warrant follow-up with your brokerage firm.

General Appearance

Account statements should look professional and not look altered in any way.  The brokerage firm’s information and logo should be uniform throughout the statement and should match all of the other documentation you have received from the company – trade confirmations, new account forms, and correspondence.

Published on:

The headlines are full of stories of identity theft and investment fraud.  There are steps you can take to keep from being an easy target.

  • Guard your Social Security number! Memorize the number and don’t carry your Social Security card unless you know you are going to need it (for example, it’s your first day at a new job and the employer will want to make a copy of it.)
  • Just Say No. Don’t give your Social Security number to everyone who asks. If you have private insurance, doctors, dentists, laboratories, and other healthcare providers generally do not need your Social Security number to process your claim – they should only need your insurance information. If the medical provider asks for it, ask why they want it and what happens if you don’t want to give it. Be prudent in deciding whether to give it to them. Similarly, public schools, summer camps, and frequent shopper cards often request Social Security numbers, but if the number isn’t required to enroll in those programs, you shouldn’t give it.  For more information, review the Social Security Administration’s pamphlet Identity Theft and Your Social Security Number.
Published on:

If you have a brokerage account, you have probably received a pitch from your broker for a securities-backed line of credit (SBLOC).  Contrary to the flashy marketing brochure you may have seen, SBLOCs aren’t the best things since sliced bread.  Know the facts before you consider one.

An SBLOC is a non-purpose revolving line of credit using the securities held in your brokerage account as collateral. “Non-purpose” means you do not have to use the proceeds for a specific purpose like you do with an auto loan or home mortgage.  Basically, you can borrow cash against the value of your investment portfolio to finance basically anything from travel and college expenses to home renovations and buying a car.  Pretty much the only thing you can’t do with an SBLOC is use the money to purchase or trade securities.  This “easy money,” however, doesn’t come without cost or risk.

Typically, an SBLOC agreement will allow you to borrow between 50-95% of the value of your investment portfolio depending on the value of your overall portfolio and the types of investments in the account (i.e. stocks, bonds, etc.)  The interest rates charged on an SBLOC usually follow the broker-call, prime or LIBOR rates plus some stated percentage. SBLOCs typically require you to make minimum payments every month, oftentimes the minimum payment is the calculated interest amount. Because the published interest rates fluctuate, the amount of interest you are charged daily may also fluctuate.

Published on:

Many people work their entire lives to accumulate a nest egg of savings for retirement.   Others find financial success mid-career.  Either way, accumulating money can be surprising in one respect:  wealth often leads to stress.

Why?  Because it can be extremely stressful to realize that the fruits of your entire life’s work can be wrapped up in one Merrill Lynch, Morgan Stanley, or Citigroup account statement.   Retirees know how long it took to accumulate their 401K accounts.  Business people know how hard they had to work (or how lucky they had to be) to make their money.

In short, the money is irreplaceable.  During the financial crisis 2008, many investors lost huge portions of their life savings as a result of negligent or foolish recommendations by their brokers.  Smart people should ask themselves the following questions:

Published on:

Brokerage Firms | West Palm Beach False Claims Act

The Financial Industry Regulatory Authority, also known as “FINRA,” provides a public database that investors can use to research their brokers’ professional background and disciplinary history.  Investors can learn important information such as:

  • Whether the broker has been sued by other investors;