|
Remember, part of making the right investment decision is finding the brokerage firm and the sales representative that best meet your personal financial needs. Do not rush. Do the necessary background investigation on both the firm and the sales representative. Resist salespeople who urge you to immediately open an account with them.
Making An Investment
The New Account Agreement
Generally, a brokerage firm will require a customer to sign a new account agreement. You should carefully review the information contained in this document because it may affect your legal rights regarding your account.
Ask to see any account documentation prepared for you by the sales representative. Do not sign the new account agreement unless you thoroughly understand it and agree with the terms and conditions it imposes on you. Do not rely on verbal representations from a sales representative that are not contained in this agreement.
The sales representative will ask for information about your investment objectives and personal financial situation, including your income, net worth, and investment experience. Be honest. The sales representative will rely on this information to make appropriate investment recommendations for you.
Completion of the new account agreement requires that you make three critical decisions:
-
Who will control decision-making in your account? You will control the investment decisions made in your account unless you decide to give discretionary authority to your sales representative to make investment decisions for you. Discretionary authority allows a sales representative to make investment decisions based on what the sales representative believes to be best – without consulting you about the price, the type of security, the amount and when to buy or sell. Do not give discretionary authority to your sales representative without seriously considering whether this arrangement is appropriate for you.
-
|