Wealth creation experts reveal that one of the secrets of financial freedom is to invest in assets like shares of stock or securities that will generate income without spending too much time growing it. This is also known as passive income which is the preferred investment method because your money works for you even while you sleep or go on vacation.
Broker or adviserYou need not be an expert in securities transactions to start investing. Many successful investors were once beginners as well who only learned the basics and relied on advisers and market data for guidance. Getting someone like a broker or adviser to act in your behalf when investing or liquidating any investment should be your first step.
An investment adviser is one who is paid to give advice about investing in securities and must be registered with the state securities agency to act as such. An adviser may employ investment adviser representatives to work closely with you. These representatives must be licensed as well or registered with your state securities regulator.
A broker serves as the go-between of the buyer and seller in a transaction. He or she must be registered and licensed as well with your state securities agency. Unlike the financial adviser, a broker may not necessarily render advice as part of its services to you.
Choosing only a licensed or registered broker or adviser is highly important because if your unregistered broker goes out of business, you will not be able to recover your hard earned investment money even with court action.
Here’s how to verify their license and registration:
* Check the database of your state securities regulator
* Read their registration forms which generally contain plenty of information about the adviser’s business. When dealing with a new broker, always ask for this registration form or obtain a copy from your state securities regulator.
* If your adviser is also a broker, you may want to check the securities regulator’s database of brokers as well.
* Check for any violations or problems with your state securities regulator
Obtain the following information from your prospective broker:
* investor experience
* educational background
* recent employment history
* licenses and state registrations
* membership with a securities investor insurance system
* list of investment products and services being offered
* compensation for services—hourly rate, flat fee or commission fee
* history of violations with government regulators.
Don’t leave your hard earned money to chance. Retain the services only of reliable and licensed brokers and investment advisers.
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