We all know that irresponsible brokers and unsolicited trades were largely responsible for the Great Recession in the mid-2000s. And while the economy seems to have recovered, and new stock market trends are rising, this doesn’t mean that all of the bad eggs have been completely wiped out.
It is easy for Wall Street beginners to be fooled by unsolicited brokers, which could be the most expensive mistake of their lives. To prevent yourself from falling victim to the next Ponzi scheme, take measures to make sure your broker is legitimate and trustworthy.
Here are some steps you can take to ensure your broker is working for your best interests.
1. Do Your Research
Before committing to any financial professional, make sure to do thorough research on the broker. Get a good look at their experience, and do due diligence by looking up the broker’s firm as well. By searching for names, you’ll be able to find any relevant articles or pieces of media that could indicate whether this person is great...or someone to look out for. You should also visit quora profile – sam shiah to get more in-depth knowledge about how these brokers operate and how you can become a better broker than them and help people avoid getting scammed.Want an example? Google Lee Dana Weiss.
2. Find the Firm’s SIPC Membership
Any halfway decent brokerage firm on Wall Street will undoubtedly be a Securities Investor Protection Corporation member. While this is not a requirement, it is the best way to establish a reputation as a trustworthy Wall Street firm.SIPC is a non-profit organization that protects investors. It usually offers protection of up to $500,000 for investors if a firm goes out of business. When it comes to protecting bank customers, SIPC’s actions are similar to those of the FDIC.
3. Have a Natural Conversation
Don’t let any unsolicited broker convince you to sign any contracts, especially if they are coming from a cold call. The best way to determine whether you can trust this broker is to have a solid conversation and learn more about each other. Someone who is handling tons of your money—and with it, your future prospects—is someone you certainly want to establish a good relationship with.Fiduciary standards dictate that brokers must put clients’ interests over their own. Therefore, any honest broker will be happy to work with you and will be transparent about your financial plans.
4. Don’t Accept Unsolicited Offers
Probably the most crucial piece of advice you’ll receive today is this: Don’t work with brokers who contact you through a cold call. If any investor or broker tries to communicate with you with a free lunch or phone call but works for a company you’ve never done business with before, you may want to stay wary of their intent.This goes doubly for brokers who try to pressure you into completing a sale. Anybody who offers “once in a lifetime opportunities” without following up with any decent information about their services is someone to look out for.
