What to Expect When You Open a Brokerage Account
If you're reading this, you may be planning to open a brokerage account. You may wish to invest for your retirement or a child's education, or simply to try to grow some cash you have set aside. This publication explains what to expect if you do decide to open a brokerage account, including what information you will be asked to provide, what decisions you will be asked to make, what questions you should ask your registered financial professional and what your rights are as a customer of a broker-dealer firm.To get more news about
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Information You'll Be Asked to Provide
When you decide to open an account, there will be paperwork to complete. This will include a new account application, which broker-dealer firms may also call a new account form, account opening form or something similar. This application form will require you to provide some information about yourself, as well as ask you to make certain decisions about your account. As explained in more detail below, a broker-dealer firm’s registered financial professionals use this information for several purposes, including learning about you and your financial needs and meeting certain regulatory obligations. While it may take a little time to fill out the application, it is important to answer the questions on the application accurately. So, be sure to read the application and the accompanying agreements and other documents the brokerage firm gives you carefully—and ask questions about anything you don't understand.
Be accurate when you are providing the information requested on these forms. Your registered financial professionals will use the information to understand your financial needs and to meet certain regulatory obligations. In addition, you are certifying that the information you've provided is accurate when you sign the new account application.
Decisions You'll Be Asked to Make
The new account form will also ask you to make some important decisions about your account, including how you will pay for your transactions, how any uninvested cash will be managed and who will have control over and access to your account.
The new account application may come with other documents-such as a "Customer Agreement," "Terms and Conditions" or the like. These documents, along with applicable state and federal laws plus SEC and FINRA rules, govern your customer relationship with the firm. Make sure to ask for copies if you do not receive them and download or print out copies of these for your records if you conduct business with your brokerage firm online.
If you haven't already done so, make sure you check out the background of your registered financial professional and the firm before you open an account with them. Although a history free from registration or licensing problems, disciplinary actions or bankruptcies is no guarantee of the same in the future, checking out your registered financial professional and firm in advance can help you avoid problems. Look up your registered financial professional and firm on FINRA Brokercheck by going to
https://brokercheck.finra.org or by calling toll-free (800) 289-9999.
Also make sure that the phone numbers and addresses that your registered financial professional and firm give you as their contact information are consistent with those listed in Brokercheck. Fraudulent entities and individuals have been known to steal the identities of legitimate registered financial professionals and broker-dealer firms so that they can get at your personal information!
As You Monitor Your Account
After you open your account, you should monitor its activity regularly. Make sure that you review all of your account statements and trade confirmations for any errors or any transactions that you did not authorize. If you see any evidence of unauthorized trading or errors, notify your registered financial professional, the financial professional’s supervisor or the firm's compliance department immediately to further protect your rights. Make sure to take notes of any conversations you have with your firm concerning such disputes, to send in your complaints in writing as well and to keep copies of these notes and all communications related to such disputes for your records.
Ask yourself whether your investments are meeting your expectations and goals and whether your goals have changed. Do your investments still appear to be right for you, and what criteria will you use to decide when to sell?
