Brokers have been known to cold call potential investors to persuade them
to invest in securities. Often, these securities are speculative. A broker
might allude that immediate action has to be taken to avoid missing out
on a limited opportunity or a claim may be made that the broker possesses
inside information. You need to understand that these are high-pressure
sales tactics that some brokers use to get more business.
If a broker is trying to convince you to make an investment through an
unsolicited phone call, you need to be wary. Ask for the broker’s
CRD number, so that you can look into his or her background through
FINRA’s BrokerCheck or through your state securities regulator and check to see if any complaints
have been filed by other customers.
Do not send money to a brokerage firm or broker after receiving an unsolicited
phone call, as you stand to lose your money. If you want to move forward
with a broker who has cold called you, it would be prudent to meet in
person, specifically at the brokerage firm. Before making an investment
with the broker, also make sure you read and understand written material
about the particular investment.