Creating smarter investors who avoid fraud is at the core of a new investor bulletin released jointly by a group of regulators this week. The tool kit urges investors to check their advisors’ licensing, registration and background, among other critical factors, before investing.
Released by the Securities and Exchange Commission, the Financial Industry Regulatory Authority, the North American Securities Administrators Association (NASAA) and the U.S. Commodity Futures Trading Commission (CFTC), the bulletin is part of regulators’ efforts to publicize investor education and protection for the first annual World Investor Week (October 2-8), a new global event being promoted by the International Organization of Securities Commissions (IOSCO).
“The best way to protect Main Street investors from becoming victims of fraud is to educate them. We want investors to ask smart questions. It’s good for them and it’s good for our markets,” said SEC Chairman Jay Clayton.
The bulletin urges investors to do comprehensive due diligence on their investments and investment professionals. To that end, it includes resources on how to do online background checks.
“Much of the investment fraud we see today is committed by people who claim to be investment professionals, but are not properly licensed and registered,” the bulletin states. “Investor.gov, SmartCheck.gov and BrokerCheck all offer free and simple search tools that allow you to find out if your investment professional is licensed and registered, and if he or she has a disciplinary history or customer complaints. State securities regulators also provide detailed information about your investment professional. Doing a background check is a great first step toward protecting your money.”
“I see firsthand the positive impact of our investor education efforts, whether it’s our outreach team conducting in-person events, online resources on Investor.gov and public service campaigns or our assistance team that handles investor complaints and solves problems on a daily basis,” said Lori Schock, director of the SEC’s Office of Investor Education and Advocacy.
Among the investor education sessions SEC staff conducted this week were a Q&A with seniors about investing, retirement and ways to protect against fraud; a Twitter chat about robo-advisor investing; a Thrift Savings Plan educational program for federal employees; and insight into ways to assess fees and how to avoid scams. The outreach also included saving and investing presentations for students and the military.