Saving for college, a new home, or retirement is one of the most important things a person can do to save for the future. Oftentimes we put our finances in the hands of a financial adviser or investment broker without researching who is handling our money. It can be as easy as looking through the Yellow Pages to find someone willing to invest your money for the future, but are they the right person to make your money grow?
One of the best ways to find a good investor is to ask around. Make a list of the names of businesses and financial advisers that you would like to check into. If you know someone who is a great researcher then ask them how they are investing for the future, and ask who is their financial adviser. If someone tells you they are using a friend or a relative then place their name at the bottom of your list. Often times people will invest with people they know without looking at the bottom line.
If you live in a rural area your list may only have two or three names. It may benefit you to look in a larger town or to search the Internet. By using the yellow page feature on the Internet you can locate financial advisers listed by the zip code. You will more than likely find independent advisers and well know companies like Morgan Stanley or Edward Jones.
If you go to work for a large company you may be offered a 401K or a retirement account. Before signing up ask a lot of questions about fees or penalties for withdrawing funds, average percent of return, and any minimum or maximum deposits. Just because an investor tells you that by joining a group fund you are saving or making more money does not make it so. Find out when your company schedules their annual enrollment changes. Find out if your contributions can be payroll deducted. When investments are deducted by payroll it is easier for the consumer to live without those funds. If an investor has to mail in a check to pay for funds they run the risk of not contributing as much as you need to during hard times. Shop around and find out what investor is the best for you.
By calling your state securities regulator you can check into the background of stockbrokers and brokerage firms. Call and ask for a CRD report, or central registry depository. This report can give you information on education, security exam scores, licensing, written complaints, pending or arbitration proceedings and any disciplinary actions. The information is given to you in confidence and the broker is not notified that you have requested the information. In most cases this information is free or available for a small charge. It is important to check before investing your hard earned money because there may be a fee to remove your money from certain investment funds.
A good web site to look at is the North American Securities Administrators Association. This site goes over the history of the NASAA, investor information, regulatory resources, and issues and answers. Their site can be found at www.nasaa.org/About_NASAA/. The job of the NASAA is to protect the investor. They do this by investigating violations of state law, license firms and investment agents, and educating the public on investment fraud. This site has a NASAA investor alert that will make you aware of schemes and fraudulent swindlers out there ready to steal your heard earned money.
You owe it to yourself and your family to make sure your future is secure by making the best choices when investing your dollars. If your were buying a car you would drive it first. Do not invest all your money with a financial adviser without giving them a test drive either.