Here’s how to protect yourself.
Most of the big name brokerage houses have a full-time staff researching companies, funds, and alternative investments.
That’s the theory, at least.
That’s not always the case, though, mainly because of conflicts of interest.
Then they pressure the brokers to steer their clients into those investments.Here’s one of many such cases.
If you suffer loss because you were steered into bad investments, you have no remedy.
Brokers are not bound by that.
If you’re not paying anything, someone else is.
Find out if your broker is acting as your fiduciary.
A few are, but most aren’t.
(It’s worth asking, but don’t hold your breath.
The vast majority of brokers, for obvious reasons, avoid becoming a fiduciary.)
Check out their credentials.
CFP (Certified Financial Planner) is generally regarded as a high standard of objectivity.
If your broker has other letters, it’s worth your while to check out what they mean.
Do your own homework on the investments they suggest.
Those sites are free, and have tons of information.
In the long run, your best bet is to wean yourself from personal brokers altogether.
It’s nice to do business with someone you have a good relationship with.
It is even better to do business with someone you’ve checked out.
But it’s best when you don’t have to pay for something you no longer need.
Title image remixed fromVector3D(Shutterstock).
