You’re ready to invest in the stock market. If your name is not Warren Buffet, there is a lot to know, a lot to learn.  You decide instead of doing it on your own you will work with a stockbroker.  Fortuitously, your telephone rings and on the other side of the call is Jane Stockbroker.  And boy does she have a product to sell you, one that she has researched, she tells you, and one that she believes is going to be something that would be a perfect fit for you.

You listen to her pitch and everything sounds great.   Ms. Stockbroker is going to ask you some questions, as she is required to do to determine if the trade she has in mind is appropriate for you.  She is going to ask you questions as to your history of investing in the market, your income, risk you want to take with your investments and what your investment goals are for your money.

She then is going to tell you everything great about her and the proposed security she is recommending.  And here is where the customer makes his or her first mistake: the response is silence.  Silence because the customer is embarrassed to ask questions that fearing a show of ignorance.  Perhaps silence because the customer does not have the money to invest that Ms. Stockbroker is recommending be made for this absolutely fantastic opportunity.

Ms. Stockbroker has certain responsibilities that are governed by various state and federal regulatory entities.  You too, however, have a responsibility, and that is to yourself.  Remember this: Ms. Stockbroker wants to work for you, not the other way around.  Take the time as you would with any interview for someone working for you to ask the questions.  Why are you so hot on this stock? What about it jumps out at you? What historically has the stock done?  How stable is the company?  What do you get out of this, or said otherwise, what are your commissions?  While Ms. Stockbroker has certain responsibilities with the relationship, so do you, and you must do your do diligence before investing with Ms. Stockbroker.

Of particular importance in this interview process is to learn about Ms. Stockbroker.  How long has she been working in the stock market?  Where did she start?  Does she concentrate on certain areas of the market, perhaps the healthcare or technology sector?  Has she ever been sued by a client? Has she ever been in trouble with the regulators?  How many people in a similar situation like you does she work with and for how long has she worked with them?

You want to get to know Ms. Stockbroker and find yourself comfortable with her.  Make her earn your trust by starting slowly and if the relationship continues, continue that slowly.   Ms. Stockbroker can provide a service that can benefit you, but make no mistake, it is a relationship you control, and your failure to ask the questions, every question you want for as long as you have the relationship, can cost you more than a relationship, it can cost you your retirement.

The Law Offices of Barry M. Bordetsky handles matters such as these. If you have questions regarding your securities account, please visit our website at or contact Barry M. Bordetsky at (800) 998-7705 or