Tag: FINRA Arbitration

FINRA- Before You Invest, Working With Your Investment Professional

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The Financial Industry Regulatory Authority (FINRA) issued an article titled Working With Your Investment Professional which provides tips to promote a productive relationship between customers and financial advisors.

FINRA has identified the following 10 tips for customers:

  1. Review the background of any investment professionals you work with or are considering working with. This can be done by using FINRA’s BrokerCheck.
    2. Be clear in your investment goals and risk tolerance with your financial advisor.
    3. Prior to investing, research the product.
    4. Discuss fees with your financial advisor. Fees include commissions, costs associated with the sale of an investment, or management charges.
    5. Review and retain you monthly account statements, confirmations and other correspondence.
    6. Contact your financial advisor immediately if you have questions or concerns about an investment. Additionally, contact the firm’s compliance department if you are unhappy with you financial advisor’s response.
    7. Be wary of exaggerated claims about an investment.
    8. Be wary of financial advisors who pressure you to invest quickly or do not provide you sufficient information about the investment.
    9. Never send money to a firm or financial advisor that you are hearing from for the first time.
    10. Contact the firm’s compliance department in writing if you suspect improper business conduct. Additionally, retain a copy of your complaint and in responses the firm sends.

If you and have suffered investment losses, please contact the Hanley Law to explore your legal options. The Hanley Law is dedicated to helping investors who have been victims of securities fraud. If you have lost money as a result of securities fraud, you may be able to recover your financial losses. Contact us today toll free at (239) 649-0050 for a free initial consultation.

FINRA Issues Article Titled Before You Invest, Suitability: What Investors Need to Know

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The Financial Industry Regulatory Authority (FINRA) issued an article titled Suitability: What Investors Need to Know which provides investors with a guide to understanding their investment profile.

FINRA’s suitability rule (FINRA Rule 2111) is based on the requirement that brokerage firms and their brokers, financial advisers or financial consultants deal fairly with their customers. In compliance with FINRA’s suitability rule (FINRA Rule 2111) brokerage firms and their associated persons “must have a reasonable basis to believe” that a transaction or investment strategy involving securities is suitable for the customer prior to making such a recommendation. The firm’s reasonable belief must be based on information obtained through the brokerage firm’s obligation to recommend securities or transactions that are suitable for the investor based on the investor’s:

  • age
    • other investments
    • annual income
    • liquid net worth
    • tax status
    • investment objectives
    • investment experience
    • expected time to reach financial goal
    • liquidity needs
    • risk tolerance

To help ensure that investors receive suitable investment advice, firms and their associated persons are required to diligently learn about a customer’s investment profile before recommending a transaction or investment strategy. Therefore, the suitability rule places an obligation on the brokerage firm and the firm’s associated person(s) to seek information from the customer prior to recommending a security or transaction.

If you and have suffered investment losses, please contact the Hanley Law to explore your legal options. The Hanley Law is dedicated to helping investors who have been victims of unsuitable investment recommendations. If you have lost money as a result of securities fraud, you may be able to recover your financial losses. Contact us today toll free at (239) 649-0050 for a free initial consultation.