Selecting Brokers and Investment Advisors

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When selecting a broker or investment advisor, research the person's education and professional history as well as the firm this person works for. Ask:

  • Has this person worked with others who have circumstances similar to yours?
  • Is this person licensed in your state? Your state securities administrator lists individuals and firms that are registered in your state. Ask if the regulatory office has any other background information. You can find out how to reach your state securities regulator by visiting www.nasaa.org.
  • Has the person had any run-ins with regulators or received serious complaints from investors? Call your local state securities regulator or the SEC. You can also check out FINRA's BrokerCheck to find licensing, employment, and disciplinary information. Or call FINRA toll-free at 1-800-289-9999.
  • How is the person paid? Is it an hourly rate, a flat fee, or a commission that depends on the investments you make? Does the person get a bonus from his or her firm for selling you a particular product?
  • What are the fees for setting up and servicing your account?

Additional organizations that could also be helpful are:

  • The Commodity Futures Trading Commission (CFTC) provides consumer alerts and advisories. The Commission oversees the Reparations Program that resolves disputes between commodity customers and commodity professionals. Through this program, you can institute "reparations" proceedings against commodity professionals registered with the Commission if they violate the anti-fraud or other provisions of the Commodity Exchange Act. To ask a question, report information or submit a complaint, contact the CFTC.
  • Both the North American Securities Administrators Association and the National Futures Association can offer helpful information.

Retirement Planning

Part of smart investing is planning for retirement. The average American spends 20 years in retirement, but less than half of Americans calculate how much they need to save for their retirement years. Regardless of your age, it's never too early or too late to start.
The three major components of a retirement portfolio are generally benefits from pensions, savings and investments, and Social Security.
If you are still working and your employer offers a plan, find out how it works. If your employer has a 401(k) type plan and offers to put some money in if you do (called a match), this should be the first place that you save. Make sure you understand how a job change might affect your employer-based retirement plan and what your options are for saving that money. If you switch jobs before you are fully vested, you may lose a significant amount of money.
As you approach retirement, there are many factors to consider. Experts advise that you will need about 80% of your pre-retirement income in your retirement years. The exact amount, of course, depends on your individual needs. For example:

  • How old do you plan to be when you retire?
  • Will your spouse or partner retire when you do?
  • Where do you plan to live? Will you downsize, own, or rent?
  • Do you expect to work part time?
  • Will you have the same medical insurance you had while working? Will coverage change?
  • Do you want to travel or pursue a new hobby that might be costly?
  • If you have a financial advisor, talk to him or her about your plans.

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