What Do You Really Know About Your Investment Adviser?

When you trust someone with your investments, you are taking a big step. You are believing that this person or company has the right experience and background to handle your investment portfolio. But what do you really know about your investment adviser?

First, let's define an investment adviser. The U.S. Securities and Exchange Commission (SEC) defines this professional as "an individual or a firm that is in the business of giving advice about securities to clients." The SEC gives the example of an individual or firm that receives "compensation for giving advice on investing in stocks, bonds, mutual funds, or exchange traded funds."

Below are some things you need to know about your investment adviser:

1. How is your investment adviser paid? It is important that you understand how the adviser is compensated. For example, is he or she paid a percentage of the assets that are managed or will you be charged a fixed fee?
2. Is your investment adviser registered with the SEC? Not every investment adviser has to register with the SEC. However, if he or she manages at least $25 million in client assets, the registration requirement will apply.
3. Have there been previous problems with regulators or clients? When you entrust your money with someone, you need to be aware of any past problems with clients or regulators. You can check out this information by obtaining copies of the Form ADV, which is filed with the SEC or state securities agency. You can also use FINRA's BrokerCheck to look into the background of the investment adviser.
4. Does your investment adviser have the right experience to manage your portfolio? This question is one that you should have answered before investing your money. You want to ensure that your investment adviser has the experience in helping clients who have similar situations to your own.

By doing your research and getting answers to your questions, you can reduce your chances of becoming a victim of investment fraud.

About Our Law Firm
If you have lost money because of the actions of your investment adviser, you should contact an experienced securities fraud attorney for a free case evaluation by calling toll-free 1.866.827.6537 or filling out our online form. Our securities fraud lawyers are licensed in Ohio and we represent investors nationwide in securities arbitration and litigation claims.

Be sure to order a FREE copy of attorney David Meyer's book, Five Signs of Investment Fraud...And What to Do if it's Happened to You.