When looking to invest your hard-earned money, it’s crucial to do your due diligence on any investment company or advisor. This includes researching the background, fees, and past performance of the company as well as confirming they are properly licensed. Calling a company directly to ask questions is an important part of this process.
Check registration and licensing status
Legitimate investment companies should be registered with regulators like FINRA or the SEC. You can search their databases to confirm registration status. Licensed professionals will also clearly display license numbers.
Research company history and reputation
Search online to find background information on the company, key personnel, and any past litigation or customer complaints. Reputable firms will have positive reviews and a solid history.
Understand the investment strategy
Make sure you understand exactly how the company invests your money and manages risk. Transparency about investment methodology is a good sign.
Compare performance and fees
Compare returns to appropriate benchmarks, taking risk levels into account. Also carefully evaluate account fees and sales charges, which can erode returns.
Get info in writing
Always get details on investment recommendations, account charges, and potential conflicts of interest in writing first.
Vetting an investment company thoroughly before handing over your money is well worth the effort. Careful research and asking lots of questions helps avoid investment scams.