Page 21 - Provoke Mag Vol5

A general review of an investment statement does not take a degree in Financial Management to understand. Here are a few things that you should validate during your review.
Organizations must accept responsibility for the bad behaviors of financial advisors. Compliance pro- grams often focus on the sales practices of advisors to police the activities in client accounts. Individual su- pervision is often left to a designated supervisor. Make sure you know the name of the supervisor for your financial advisor. Remember to check out the financial advisor and supervisor on the FINRA website.
www.finra.org.
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Firm Name: Make sure that the investment company name on the state- ment is the name of your Advisor’s company. Find out who is holding your money. If there are other company names disclosed on the statement, ask about the relationship to the advisor’s company and the listed firms. You can confirm the relationship by calling the other firms directly. If your ad- visor discourages this behavior, ask “why” and contact his firm directly.
Cash Withdrawals: Look for any distributions or withdrawals from the account that you did not authorize. If you see a fee deduction make sure it is the calculated amount agreed upon in your investment advisory contract. You should have a copy of all opening documents so you can ref- erence what the advisor can and cannot do in your account.
Trade Activity: Look at the trading activity on the statement. Are you aware of all the activity in the account? Have you signed a trading authorization giv- ing your advisor the ability to make trades without consulting you? If not, make sure to look for any trades made without your authorization.
Ending Balance: If your balance is lower than the last statement and your advi- sor tells you that your account is increasing in value, you should be concerned. The ending value of your account should be the total of stocks and cash held in your portfolio. Ask the advisor about stocks held in your account that do not have a price assigned. Look at the date of the statement and see if the stock prices on the statement are the same as the closing day prices listed on a reputable finance website. Understand what end date value the advisor uses to calculate his fee.