Financial advisors and brokerage firms are licensed by the government. FINRA (the Financial Industry Regulatory Authority) offers a convenient online service, BrokerCheck, that provides investors with a broker's employment history, licensing information and regulatory actions, arbitrations and complaints.
Five Questions to Ask Before Investing
The Securities and Exchange Commission, through their investor education website investor.gov, offers five questions to ask before investing.
For more information, visit: https://www.investor.gov/research-before-you-invest/research/five-questions-ask-before-you-invest
Investors can buy and sell securities in two ways. The first is to open a trading account through a brokerage. This can be done with an online brokerage, where you do all of the work of buying and selling securities. Alternately, you can hire a financial advisor, who may provide recommendations as to which securities you should buy and sell. You will likely spend more money with a financial advisor, in paying them a fee, but the trade-off is that you have their advice on making strong investment decisions.
The second is to place money in a retirement account, such as a 401k plan or individual retirement accounts (IRA). 401(k) plans are offered by employers, and the employer sometimes offers a "company match" of a certain amount of money for every dollar you invest in your plan. Company match programs are usually offered only by businesses; non-profit and government employers generally do not offer them, though they may offer a pension plan instead. These plans often (but not always) offer only mutual funds for investing. Generally, you will need to conduct your own research in deciding which funds will make up your portfolio, depending on which funds the plan offers. A good rule of thumb when investing your money in a 401k plan is to invest in mutual funds that require low administrative fees. Using an online database such as Morningstar Investment Research (free to access for every Brooklyn Public Library patron with a BPL card), you can search for low-fee mutual funds.
To open an IRA, you need to work with a financial advisor. Be advised that along with the fees you will pay to your advisor, your investment choices may be limited to funds maintained by the advisor's company, and those funds may include substantial fees as well. However, you do get the benefit of the investment advice of a licensed professional who can create an investment plan for you, and/or help you reach your retirement goals. You are paying the financial advisor for the work you may not be doing.
Stocks that are offered to the public must be registered with the Securities & Exchange Commission. Municipal bonds must be registered with the Municipal Securities Rulemaking Board. Be aware that an unregistered security may be a scam.
Public companies routinely file financial reports with the SEC. These reports are available to the public through its EDGAR (Electronic Data Gathering, Analysis & Retrieval) database. The more common, periodic filings for public companies include:
10-K :An annual report on the company's financial performance for the fiscal year
10-Q :A quarterly report on the company's financial performance for the latest fiscal quarter
8-K :A report for notable events, such as a company press release, or a merger or acquisition
DEF14A: A proxy statement to shareholders for the fiscal year's shareholder meeting, which includes voting on significant matters.
How can you research these documents? Using your Brooklyn Public Library card, you can log onto the Morningstar Investment Research Center (accessible on our Learning Resources tab above). Morningstar provides several years of EDGAR documents for most public companies. Filings for those companies that are not covered by Morningstar are available on the SEC's website, sec.gov, as are all public filings dating back to the late 1990s.
For access to information and filings on municipal bonds, visit the Municpal Securities Rulemaking Board's EMMA (Electronic Municipal Market Access) website (listed on the Free Websites tab, above)
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Financial Coaching:
Do you have questions about credit or debt? The Financial Coaching Corps (FCC) can help you manage your money, find resources in a financial crisis, and make progress toward your financial goals.
Make an appointment with a coach from the Financial Coaching Corps of the Community Service Society of NY. At this time all coaching is virtual by phone or Google Meet.
Please select an appointment date and a financial coach will confirm your appointment by e-mail.
If you have questions about financial coaching, email us at bplfinancecoach@gmail.com.
Virtual Financial Coaching is a service of Brooklyn Public Library's partner, Community Service Society.