Working with Financial Professionals

Working with Financial Professionals, Understand How They Are Compensated and Tips to Ensure a Productive Relationship

Good Communication with Your Investment Professional is Important

The following are important tips to ensure a positive and productive relationship with your Financial Professional.

According to the Financial Industry Regulatory Authority, investors are encouraged to follow these important tips to ensure a positive and productive relationship with your Financial Professional:

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Use FINRA's BrokerCheck to Check on the Background of Any Investment Professional

  • Be clear and honest about your investment goals and the amount of risk you are comfortable taking
  • Ask questions about any potential investment before you make it. Ask for a prospectus, research information, and any regulatory filings. Read the materials carefully!
  • Discuss the fees that will be charged including sales commissions, mark-ups, and any other costs associated with the sale or redemption of your purchase.
  • Read and retain your monthly or quarterly statements. Contact your Financial Professional immediately about any transaction you did not authorize, or an item on the statement that you do not understand.
  • If you suspect improper business conduct or have an issue with your Financial Professional, contact the firm's compliance department, preferably in writing. Don't forget to keep a copy of all correspondence with the firm. 

Understand How They Are Compensated

Today, many firms offer both brokerage and investment advisory services to clients.  You may pay for services depending on the type of account or investment products you chose.

For example:

  • Brokers will charge a commission on the securities bought or sold.

  • Investment companies may charge a fee based on the amount you invest (such as a mutual fund company).  This is usually referred to as a front-end load where you pay a fee at time of purchase, or a back-end load where you pay a fee when redeeming or liquidating the investment.  

  • Investment advisers may charge an hourly fee for services, a flat fee for periodic portfolio reviews or a financial plan.  However, the fees that are charged must be reasonable. 

  • In some cases, clients will pay a “wrap” fee that may cover investment advice, brokerage services, administrative expenses, and other fees. 

NO MATTER WHAT THE ARRANGEMENT, ALWAYS ASK YOUR FINANCIAL PROFESSIONAL HOW THEY WILL BE COMPENSATED.

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Perform Your Own Independent Research on a Representative

Perform Your Own Independent Research on a Representative

Unfortunately, some financial professionals may have a disciplinary record - whether it’s a customer complaint, bankruptcy, lien, civil judgment, or a regulatory action taken by the New Hampshire Bureau of Securities Regulation, FINRA, or the Securities Exchange Commission.  Most of this information about the representative is available for review at Brokercheck.org at  https://brokercheck.finra.org or by calling a representative at the New Hampshire Bureau of Securities Regulation at 603-271-1463.

Always investigate before you invest!

NH Bureau of Securities Resources

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