Get free help preparing your taxes from AARP Foundation Tax-Aide. Find a location



Celebrate Black Life, History, and Culture!
Rewards for Good Sweepstakes
Happy African American couple
Life at 50+ - Register for the Digital Experience
AARP Auto Buying Program

Jobs You Might Like



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


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 Store membership discount aarp benefits

Members save 15% on eligible products/services, 5% on UPS shipping at The UPS Store®.

membership adt

Small business owners save 20% on new installation of any new ADT security system.

Man using cell phone outdoors

Members save on monthly service & usage fees and get free activation with Consumer Cellular.

Member Benefits

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

Rewards for Good

Your Points Balance:

Learn More

Earn points for completing free online activities designed to enrich your life.

Find more ways to earn points

Redeem your points to save on merchandise, travel, and more.

Find more ways to redeem points

Advance your skills. Transform your career.

Explore your learning possibilities.