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.
- Review your 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: