Why is it important to know how my broker gets paid?
Unfortunately, investment fraud is sometimes pulled off through charging
outrageous fees and commissions that may not be readily apparent to investors
unless they are really looking for it. Even when these types of charges
are legitimate, it’s still important for investors to understand
how their brokers and financial advisors are getting paid.
Brokers and advisors could be making money in a number of ways, including
the salary and commissions paid by their employers, hourly or flat-rate
fees for their services, third-party commissions, or a combination of
these sources. Unfortunately, some unscrupulous financial professionals
may try to pressure investors into investments that generate a commission
for the broker—even when those investments aren’t really right
for the client. Other fraudsters may try to “hide” outrageous
fees by burying the fee structure in the “fine print” or just
failing to mention it.
Of course, not every broker is trying to defraud you. But it’s still
wise to understand the fees and commissions associated with your investments.
Here are some actions you can take to learn more:
- Ask your broker or advisor directly about fees and commissions.
- Carefully read through your brokerage agreement and investment documentation.
- Always do your own research about investments and advisors before investing.
account statements and other documents to monitor fees and commissions.
If you have sustained losses due to stockbroker fraud or misconduct, reach
out to an experienced
investment fraud lawyer with Meyer Wilson today. Our investment fraud attorneys have represented
more than 800 investors nationwide, and we know how to thoroughly investigate
and pursue investor claims in FINRA arbitration and mediation.
For more information, watch Attorney Courtney Werning's video below
on how brokers get paid: