Stock brokers are committed to putting your financial interests before their own. Unfortunately, it may not be easy to find brokers or advisors who believe in putting your interests first.
If you trust a stock broker to give you financial advice and to handle your stock investments, you will expect that the broker will behave in a reasonable manner, as a stock broker should behave under similar circumstances.
In such a situation, brokers may not be totally committed to acting in your best interests and this can make a big difference to the return on investment you will get on your stock portfolio.
Always remember that you are the customer and make the investments decisions yourself. If your broker disregards your views and you end up losing money due to investment broker malpractice, you are entitled to claim compensation for your losses.
How is a broker expected to behave?
The standards for stock brokers and other investment advisors have been clearly defined by the National Association of Securities Dealers (NASD), the New York Stock Exchange (NYSE) and other regulatory organizations.
You can file a malpractice suit against brokers, who have caused you to lose money due to either negligent or intentional acts committed by them. Brokers cannot make trades that are inconsistent with your directives, or make excessive trades to earn additional commission.
While giving you investment advice your stockbroker must take into account your objectives, financial resources and risk tolerance. A finance broker cannot mislead you about any investment. A financial broker should not sell you products that are not offered by the brokerage firm, or improperly mark tickets to avoid scrutiny into trades.
Brokers must not switch mutual funds only to earn extra commissions. Investment planning and investment management should be done by brokers in keeping with your objectives, financial resources and risk tolerance and they must always keep you informed. Recommending stocks based on the broker`s interests or insider information is prohibited.
If you have been a victim of stock broker fraud, you are entitled to file a malpractice lawsuit to claim compensation.
How to select a broker you can trust?
As a stock investor you may be happy that your investments are being handled by a licensed series 7 stock broker, who is working for a major stock company, though in reality that may not be enough.
Brokers who work for brokerage houses are expected to meet their sales targets in terms of trading commissions and brokerage fees. They are not rewarded for helping you to make money on your investments.
To succeed, full service stock brokers must have a large number of active investment accounts and it may not always be possible for them to pay attention to the smaller accounts. In such a situation, the larger accounts get the most attention, while the smaller accounts tend to be forgotten by brokers.
Ask relatives, friends and work colleagues to recommend stockbrokers they have worked with and research your options, before you select a broker. Talk to different brokers and ask questions about their investment philosophy.
Listen carefully to what they say and what they don`t and draw your own conclusions. Look for a competent financial broker who you feel you can rely on to keep your best interests in mind.
Author Resource:-
Ayna Miah is the author of the popular book "Stock Brokers: Who are they and what do they do". Now he wants to share his money-making industry secrets with you. Discover the insider tips, techniques and secrets that will turn you into a Successful Stock Broker and even if you have no experience whatsoever. Please visit www.aboutstockbrokers.com
![[Valid RSS feed]](http://www.freebie-articles.com/images/rss.gif "XML Feed For RSS")
Category Rss Feed
Print This Article
Add To Favorites