Whether you work with a broker or adviser or you trade on your own,
you should always monitor your investments. By keeping an eye on your
investments, you can prevent minor mistakes from turning into big problems.
You can protect yourself by taking the following steps:
1. Read and keep all documents that you receive from your broker, mutual
fund or investment adviser. Check to make sure your confirmations and
account statements are accurate.
2. Keep good notes of communications with your broker or adviser. Taking
notes when you're talking to your broker or adviser will help if
there is a problem.
3. Get all confirmations and account statements sent directly to
you. If you can't look after your own investments, get copies of
these documents
sent to someone you trust, such as a family member, lawyer or accountant
so that there is always a pair of independent eyes looking after
you.
4. If you don't get account statements or confirmations, follow up.
You have a right to this information. If you are not receiving these
documents
on a regular basis, that could be a sign of trouble.
5. Ask questions about any information you receive about your investments.
If you don't understand something, ask questions. If investments
that you did not authorize appear on your confirmations or account
statements,
contact your broker or adviser at once. Don't wait to see how the
investments perform.
6. Even if you don't trade online, consider getting online access
to your account. Online access to your account allows you to review
your
account whenever you want. You can verify information that you received
from your broker or adviser or in your confirmations or account statements.
You also may be able to request that your confirmations and account
statements be sent to you via email.
7. It is never acceptable to make checks or other payments payable
to your broker, adviser or another individual for an investment.
In most
cases, money should only be sent to your brokerage firm, its clearing
firm, or another financial institution.
8. Meet with your broker and visit the firm, if possible. Investments
are a major financial undertaking and should be afforded the same
degree of investigation and caution as any other major purchase you
might
make.
9. Conduct independent research on your investments. Ideally, you
should independently verify information by thoroughly reading prospectuses,
research reports, offering materials, annual reports (Form 10-K),
quarterly
reports (Form 10-Q), and other filings that a company makes with
the SEC. SEC filings, such as Forms 10-K and 10-Q, can be accessed
on the
SEC’s website.
10. Periodically review your portfolio. Make sure the securities
in your account still meet your investment objectives. Also, make
sure
you understand
and are comfortable with the risks, costs, and liquidity of your
investments. As part of this review, you may want to check the
information that
is on file at your brokerage firm regarding your accounts, such
as new account
agreements, margin account agreements, option account agreements,
and any correspondence to you. You have a right to know what is
on file
about you and the firm's records must accurately reflect important
information
about you such as your age, income, net worth, financial status,
long-term goals, and investment objectives.