Ask your sales representative about the advantages and disadvantages of each arrangement. If you plan on trading regularly you may prefer to register the securities in the name of the brokerage firm to facilitate clearance, settlement, and dividend payment. According to the Federal Trade Commission, every year Americans lose more than a billion dollars on investments which turn out to be fraudulent. There are many companies which engage in fraudulent activities for a short time, attract a large number of investors and close down before they can be detected, only to reopen in a new location under another name selling another investment scam. Fraudulent sales representatives may mislead you by using phony sales pitches.
Potential investors can avoid losing money by listening for clues of a phony sales pitch.
Do not allow yourself to be swayed by high-pressure sales tactics. Be wary of sales representatives who claim that you must invest immediately or lose out on a once in a lifetime offer. These sales representatives could want your money. An excessive number of transactions in your account or errors in record keeping. Unauthorized trades or adjustments to your account.