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Ask

Questions

Questions You Should Ask 

About Your Investments
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ASK QUESTIONS | 1

Ask Questions

That’s the best advice we can give 

you about how to invest wisely. We 

see too many investors who might 

have avoided trouble and losses if 

they had asked basic questions from 

the start. 

We encourage you to thoroughly evaluate the background of any 

investment professional with whom 

you intend to do business—before 

you hand over your hard-earned 

cash.

It doesn’t matter if you are a 

beginner or have been investing for 

many years, it’s never too early or 

too late to start asking questions. 

It’s almost impossible to ask a dumb 

question about how you are investing your money. Don’t feel intimidated. Remember, it’s your money at 

stake.

A good investment professional 

will welcome your questions, no 

matter how basic. Investment professionals know that an educated 

client is an asset, not a liability. They 

would rather answer your questions 

before you invest, than confront 

your anger and confusion later. 
In this brochure, you’ll find some 

questions that you should ask about 

investment products, the people who 

sell those products, and the people 

who provide investment advice to 

you. We’ve also included some tips 

on how to monitor your investments and handle any problems. 

Keep this brochure on hand 

when considering an investment 

and use it by asking the right questions before you buy.

Investor Tip

The investment professional you 

select is very important for several reasons. You’ll want to know 

before doing business with an 

investment professional or firm 

whether they are registered and 

whether they have a history of complaints or problems with regulators.

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Questions About 

Products

• Is this investment product 

registered with the SEC or my 

state securities agency? 

• Does this investment match 

my investment goals? Why is this 

investment suitable for me? 

• How will this investment make 

money? (dividends? interest? 

capital gains?) What could cause 

this investment to increase or 

decrease in value? (for example, 

changes in interest rates, real 

estate values, or market share?) 

• What are the total fees to purchase, 

maintain, and sell this investment? 

Are there ways that I can reduce 

or avoid some of the fees that 

I’ll pay, such as purchasing the 

investment directly? After all the 

fees are paid, how much does this 

investment have to increase in 

value before I break even? 
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• How liquid is this investment? 

How easy would it be to sell if 

I needed my money right away? 

• What are the specific risks 

associated with this investment? 

What is the maximum I could 

lose? (for example, what will be 

the effect of changing interest 

rates, economic recession, high 

competition, or stock market ups 

and downs?) 

• How long has the company been 

in business? Is its management 

experienced? Has management 

been successful in the past? Have 

they ever made money for investors before? 

• Is the company making money? 

How are they doing compared to 

their competitors? 

• Where can I get more information about this investment? Can 

I get the latest reports filed by 

the company with the SEC: a 

prospectus or offering circular, 

or the latest annual report and 

financial statements? 
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FOR MUTUAL FUNDS AND 

ETFS

• How has this fund performed 

over the long run? Where can I 

find an independent evaluation of 

this fund? 

• What specific risks are associated 

with this fund? 

• What type of securities does the 

fund hold? How often does the 

portfolio change? 

• Does this fund invest in any type 

of securities that could cause the 

value to go up or down rapidly 

in a short period of time? (for 

example, derivatives?) 

• How does the fund perform 

compared to other funds of the 

same type or to an index of the 

same type of investment? 

• How much will the fund charge 

me when I buy shares? What 

ongoing fees are charged? How 

much will the fund charge me 

when I sell shares? 

• Is the fund portable? If I move 

my assets to another firm, will I 

be able to continue holding the 

fund or will I need to liquidate it? 
Investor Tip

You can verify your investment 

professional’s disciplinary history 

by visiting Investor.gov. Your state 

securities regulator may also have 

information, so you will want to 

check with them as well. You’ll 

find contact information for your 

state securities regulator on the 

website of the North American 

Securities Administrators Association at www.nasaa.org.

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Questions For 

People Who Sell 

Investments

• Are you registered with our 

state securities regulator? Have 

you ever been disciplined by the 

SEC, a state regulator, or other 

organization (such as FINRA) or 

one of the stock exchanges? 

• How long has your firm been in 

business? How many arbitration 

awards have been filed against 

your firm? 

• What training and experience do 

you have? How long have you 

been in the business? What other 

firms have you been registered 

with? What is the status of those 

firms today? 

• Have you personally been 

involved in any arbitration cases? 

What happened? 

• What is your investment philosophy? 

• Describe your typical client. Can 

you provide me with some names 

and telephone numbers of your 

long-term clients?
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• How do you get paid? By commission? By the amount of assets 

you manage? By another method? 

• Do I have any choices on how 

to pay you? Should I pay you 

by the transaction? Or a flat 

fee regardless of how many transactions I have? 

• Do you make more if I buy this 

stock, bond, mutual fund, or ETF, 

rather than another? If you weren’t 

making extra money, would your 

recommendation be the same? 

• Are you participating in a sales 

contest? Is this purchase really in 

my best interest? 

• You’ve told me what it costs me 

to buy this stock, bond, mutual 

fund, or ETF; how much will I 

receive if I sell it today? 

• Where do you send my order 

to be executed? Can we get a 

better price if we send it to 

another market? 

• If your broker changes firms, ask: 

Did they pay you to change firms? 

Do you get anything for bringing 

me along?
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Questions About 

the Progress of 

Your Investments

• How frequently do I get statements? Do I understand what the 

statement tells me? 

• Is the return on my investment meeting my expectations 

and goals? Is this investment 

performing as I was led to believe? 

• How much money will I get back 

if I sell my investment today? 

• How much am I paying in 

commission or fees? 

• Have my goals changed? If so, are 

my investments still suitable? 

• What criteria will I use to decide 

when to sell?
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How to Handle 

Problems

Act promptly! By law, you only have 

a limited time to take legal action. 

Follow these steps to solve your 

problem: 

1. Talk to your investment professional and explain the problem. 

Where is the fault? Were communications clear? What did the 

investment professional tell you? 

2. If your investment professional 

can’t resolve your problem, then 

talk to the investment professional’s supervisor (which, for 

brokers, is often the firm’s branch 

manager). 

3. If the problem is still not resolved, 

write to the compliance department at the firm’s main office. 

Explain your problem clearly, and 

how you want it resolved. Ask the 

compliance office to respond to 

you within 30 days. If you’re still 

not satisfied: 
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4. Send a copy of your letter to your 

states securities administrator or 

to the Office of Investor Education and Advocacy at the SEC. 

At the SEC, we will review your 

complaint, contact the firm or 

person you have complained about 

and ask them to respond to your 

specific complaint or question. 

Sometimes our intervention yields 

a satisfactory result. If these steps 

don’t work, you may need to take 

legal action on your own. We can 

send you information on mediation 

and arbitration, and suggest how to 

locate a lawyer if you need one. 
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CONTACT US:

U.S. Securities and 

Exchange Commission

Office of Investor Education 

and Advocacy

100 F Street, NE

Washington, DC 20549-0213

Telephone: (800) 732-0330 (toll-free)

Email: help@sec.gov

Website: Investor.gov

Ask a question or report 

a problem concerning your 

investments, investment 

account, or an investment 

professional:

sec.gov/complaint/question.shtml

Report a possible securities fraud:

sec.gov/complaint/tipscomplaint.shtml
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1-800-732-0330

Investor.gov

SEC Pub. 001 (09/16)

OFFICE of INVESTOR

EDUCATION and ADVOCACY