8 Steps in selecting a Broker

  1. Think through your financial objectives.  Fully evaluate your personal finances and decide how much you want to invest, how much return you need and how much risk you are willing to take BEFORE discussing your financial goals with your broker.

  2. Get references.  Ask friends, relatives and co-workers forf the names of brokers who have served them well.

  3. Contact the Financial Industry Regulator Authority (FINRA) hotline at (800) 289-9999 for more information about firms and their registered representatives.

  4. Your broker must be registered to do business in your state. Visit our online registry of investment professionals doing business within Vermont, or  contact the Vermont Securities Division at (802) 828-3420 for information about firms and their registered representatives.  Disciplinary information is also available by calling the Division.

  5. Conduct interviews with at least two brokers.  Talk with prospective brokers about what you want, and measure their levels of responsiveness to your needs.  Ask plenty of questions about their experience and education. Be wary of a broker who attempts to sell you a product regardless of its appropriateness to your circumstances.  Ask for cutomer references by name and telephone number.  Contact the references and ask about the broker's performance and his or her responsiveness to their needs.

  6. Ask about fees and commissions.  Your broker will likely receive a commission based on the size of your investment.  Fully understand these costs before opening an account.

  7. Determine how much service you want from your brokerage firm.  A full-service firm will offer investment advice, make recommendations, and provide research support.  A discount broker does not make recommendations about buying or selling a specific security.

  8. Be realistic in stating your net worth and the cash you have available to invest.  Do not exaggerate your net worth to impress the broker.  The broker will make investment recommendations based on your investment objectives and your net worth, among other factors.  He or she cannot make appropriate recommendations if you are not completely honest.
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