Alert
Close

Top the Treasure Hunt leaderboard by 5 p.m. Friday to win a $100 gift card! Learn more

Highlights

Open

Rock Your Finances $50K Give Away Sweepstakes
AARP-iPad-ePub-app
Car buying made easy with the AARP Auto Buying Program

Jobs You Might Like

Most POPULAR

Viewed

Work
PROGRAMS

Best Employers for Workers Over 50

See the latest winners of this AARP recognition program.

Employer Resource Center

Attract and retain top talent in a changing workforce.

Scam Alert

Checking Up on Your Broker

How to be your own private eye to ferret out problems with the law

En español | From Ponzi schemes to "free lunch" seminar rip-offs, investment swindles have already damaged the nest eggs and emotions of one in every five Americans over 65 — about 7 1/2 million retirement-age folks, according to the nonprofit Investor Protection Trust. Some people have lost their entire savings to crooked financial advisers.

See also: How to check legitimacy of investment broker.

Online resources can help boomer investors check out investment brokers

Check your investment broker's credentials onilne. — Photo by Wolfram Schroll/Corbis

And the problem could be on the upswing. Each day, some 10,000 boomers turn 65, with an eye toward retirement and the rollover of their employer-managed 401(k)s into IRAs. They join countless others who have seen their savings damaged by the recent economic downturn and are looking for money managers and investment options to help them rebuild.

If you're a newcomer to the financial adviser market, you may attempt to do your homework but still get burned. That's because most people don't look deep enough — they just want someone to give a simple yes or no as to whether a particular adviser or investment is legit, says Pat Huddleston of Investor's Watchdog. "If you want to avoid financial fraud, you have to conduct due diligence like a fraud investigator."

For a fee, firms like Huddleston's do the legwork on people and companies that are being considered. Or you can do it yourself. If you take this route, Huddleston, a former Enforcement Branch chief at the Securities and Exchange Commission, advises looking beyond the standard go-to sources.

Where to go for information

Here are a few places Huddleston suggests for your investigation:

  • BrokerCheck. This is a first stop for many. A free service run by FINRA (Financial Industry Regulatory Authority), an independent regulator for all securities firms doing business in the United States, BrokerCheck lets you find out license status, firm affiliation and other broker information.

    But what most people don't know, says Huddleston, "is that, until recently, brokers and their firms were allowed to negotiate to have past actions against them expunged from FINRA records — and not necessarily because they were deemed invalid." So, says Huddleston, dig deeper.

Next: More suggestions for broker investigation. >>

Topic Alerts

You can get weekly email alerts on the topics below. Just click “Follow.”

Manage Alerts

Processing

Please wait...

progress bar, please wait

Tell Us WhatYou Think

Please leave your comment below.

Jobs You Might Like

Discounts & Benefits

From companies that meet the high standards of service and quality set by AARP.

UPS

Members get 15% off eligible products/services and 5% off shipping at The UPS Store®.

AARP Discounts on Consumer Cellular Phones and Plans

Members save 5% on monthly service and usage charges with Consumer Cellular.

Member Benefits

Renew today! Members receive exclusive member benefits & affect social change.

Explore Your Learning Possiblities