Opening An Account
Description
This article is from the What Every Investor Should Know.
Opening An Account
Don't be shy about talking with registered representatives (sometimes known as account executives) at several firms to find the person with whom you can establish a good working relationship and level of trust. He or she will have primary responsibility for your account. You may wish to ask the NASD and your state securities commission for information they may have about your registered representative. You may also gain factual information about the firm itself by ordering a copy of the firm's registration form (Form BD) from the SEC's Public Reference Room in Washington, D.C. If you open an account with a "full service" firm, you may select your registered representative yourself or ask the firm to assign one to you. Once you have made a selection, the process of opening an account with a broker is similar in many ways to opening a bank account or a charge account with a department store. The brokerage firm will make certain credit checks and should learn many details of your financial situation and investment objectives. You will be asked to sign a customer agreement or new account form. Be sure the brokerage firm sends you a copy of these and any other forms that you sign.
Your account executive should ask you some questions about your investment objectives, the amount of risk you are willing to take, and your overall financial status. Any firm that offers you investment advice is obligated to obtain this information in order to make recommendations that are suitable to your financial situation. However, a discount broker may only need to establish that you meet its credit requirements for ordering securities.
Continue to:
My Books
