Is my broker / money safe - how to check

  • Thread starter Liquid validity
  • Start date
  • Watchers 7
L

Liquid validity

Is my broker / money safe - basic due diligence.
All these checks also apply to managed funds or any other type of investment.

Steps:
1. Regulation
2. Contact address.
3. Website domain check.
4. Useful links
-------------------------------------------------------------------------------------
Step1 - Regulation

To check for USA registration with SEC:
FINRA BrokerCheck Search
To check for USA registration with NFA:
NFA broker check
To check for UK registration with FCA:
FCA Register
To check for Australian registration with ASIC:
ASIC broker check

In general that will cover most well known brokers.
The above regulation bodies are also the hardest for a broker
to get registered with.

If the broker you are thinking of using does not show up
as registered with any of the above, I personally would not
use them. If they pass the above checks, proceed with other checks.
In the vast majority of cases though, the above check should be enough.
No registration - think twice about using them...

-------------------------------------------------------------------------------------
Step 2. Contact address.

Find the brokers contact address - contact us link usually.
Google that address without the brokers name included.
Look for anything in the results that mentions:
Virtual office.
Other company names at the same address.


A virtual office means they are not physically there.
Multiple company names at the same address can often point to
a virtual office as well, especially if the building is small...

Google streetview check, paste address into search bar:
https://maps.google.co.uk/maps?hl=en
Does the building look like the kind of place a reputable broker
would use as office space?
Do the same with a well known reputable broker to see what I mean.

-------------------------------------------------------------------------------------
Step 3. Website domain check.

Copy paste the brokers website address into search for domain field:
Domain Name Lookup, Domain Whois | DomainTools

A domain registration that is hidden or private is not standard practice.
A different address than the brokers contact address is also not typical.

Although in some instances, with a broker that is registered with
a regulator listed in step 1, a different domain registration address
may not be that big a deal.

-------------------------------------------------------------------------------------
Step 4. Useful links

SEC - Researching and Managing Investments | Investor.gov
CFTC - Consumer Protection
CFTC - Fraud Awareness & Prevention
FCA Register
FCA - How to claim compensation
FCA - how to complain
ASIC investment FAQ
ASIC - how to complain

Specific Warnings
CFTC Advisory on Foreign Currency
FMA: Warning against unauthorised websites offering binary options trading
 
Is my broker / money safe - basic due diligence.
All these checks also apply to managed funds or any other type of investment.

Steps:
1. Regulation
2. Contact address.
3. Website domain check.
4. Useful links
-------------------------------------------------------------------------------------
Step1 - Regulation

To check for USA registration with SEC:
FINRA BrokerCheck Search
To check for USA registration with NFA:
NFA broker check
To check for UK registration with FCA:
FCA Register
To check for Australian registration with ASIC:
ASIC broker check

In general that will cover most well known brokers.
The above regulation bodies are also the hardest for a broker
to get registered with.

If the broker you are thinking of using does not show up
as registered with any of the above, I personally would not
use them. If they pass the above checks, proceed with other checks.
In the vast majority of cases though, the above check should be enough.
No registration - think twice about using them...

-------------------------------------------------------------------------------------
Step 2. Contact address.

Find the brokers contact address - contact us link usually.
Google that address without the brokers name included.
Look for anything in the results that mentions:
Virtual office.
Other company names at the same address.


A virtual office means they are not physically there.
Multiple company names at the same address can often point to
a virtual office as well, especially if the building is small...

Google streetview check, paste address into search bar:
https://maps.google.co.uk/maps?hl=en
Does the building look like the kind of place a reputable broker
would use as office space?
Do the same with a well known reputable broker to see what I mean.

-------------------------------------------------------------------------------------
Step 3. Website domain check.

Copy paste the brokers website address into search for domain field:
Domain Name Lookup, Domain Whois | DomainTools

A domain registration that is hidden or private is not standard practice.
A different address than the brokers contact address is also not typical.

Although in some instances, with a broker that is registered with
a regulator listed in step 1, a different domain registration address
may not be that big a deal.

-------------------------------------------------------------------------------------
Step 4. Useful links

SEC - Researching and Managing Investments | Investor.gov
CFTC - Consumer Protection
CFTC - Fraud Awareness & Prevention
FCA Register
FCA - How to claim compensation
FCA - how to complain
ASIC investment FAQ
ASIC - how to complain

Specific Warnings
CFTC Advisory on Foreign Currency
FMA: Warning against unauthorised websites offering binary options trading

Many thanks for this info very,very useful indeed.Regards Mike.
 
Many thanks for this info very,very useful indeed.Regards Mike.

Its becoming more of a problem (especially unregulated / untraceable brokers)
and is a common question with new brokers popping up all the time.
Glad you find it useful :)
 
good post LV, gd links also. saves you having to repeat it all.

perhaps cld also do background check on the sales / marketing guy who you dealt with - most reputable staff have a linked in profile or smthg similar. not that this proves that its all above board, but its an additional check.

ie a new facebook profile page for that person wld send alarm bells. a linked in profile where it does actually cover prev employment history & education wld look reasonable - though obv anyone can set up on linked in & make up the history bit.

bit of a tricky one really.
 
Very good post.

What amazes me is that some people don't even apply the obvious:

- does the website look like sh!t and is the English any good...?
- are they registered in some island where the law is an absolute sham?
- do they look like they are trying to pick up unsophisticated business? (E.g. low deposits and massive leverage).

Then don't send them a copy of your fkin passport and wire a bunch of cash!
 
The Securities Investor Protection Corp (SIPC), protects clients cash and securities, such as stocks and bonds that are held at troubled financial firms. However, commodity contracts, limited partnerships and fixed annuities contracts are ineligible for SIPC protection.
 
Good post but please also included FSC.

Don't know if you mean UK or Australian FSC:
Financial Sector Continuity
The Financial Services Council : Home

Neither are directly involved in broker regulation.
The FCA and ASIC do provide external links to the
ombudsman in the UK and ASIC has links to the FSC as well.
The main aim of this thread is broker regulation,
which is why they weren't included to keep it simple.
Although in the case of the UK FSC, there is no need
to ever contact them, the FCA and ombudsman handle all regulation / complaints.
 
I could have sworn this was originally posted in a subforum called "Brokers".
I checked a link I posted elsewhere and that was the case - brokers forum:
http://www.trade2win.com/boards/brokers/178754-my-broker-money-safe-how-check.html
That link now re-directs to direct access?

Direct access is the category most likely to not need these checks...

Hi LV, you are correct, we made some changes to the forums and it caused no end of problems. We have been busy fixing it and I have not had time yet to post why, what etc. More next week.
 
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