FINANCIAL HOUSEKEEPING | Check the background of your broker
Before you start working with a broker – or even if you have a relationship but are not completely satisfied with it – the BrokerCheck program from the National Association of Securities Dealers is the place to go to glimpse the adviser’s background and disciplinary history.
Ideally, the broker will provide you with his or her “Central Registration Depository” or “CRD” number, which will allow you to look up your broker’s files. You can look up advisers by name and firm to see their employment history and any “disclosure events.” You can run a search on an individual adviser, and can also examine the entire firm.
The process is fast and easy. You will find the link to BrokerCheck on the home page for the National Association of Securities Dealers at www.nasd.com.
SHORT COURSE | Brokerage sweep accounts
A brokerage sweep account is a parking place for the dividends and other income generated by an individual’s stocks and mutual funds. Those payouts go into the consumer’s brokerage account and are then “swept” off into an interest-bearing account, so that they can generate some return rather than sitting idle.
Customers used to have to request sweeps or have them done periodically but today most clients simply have the money moved automatically.
That said, most brokerage firms offer different sweep account options. The typical consumer’s cash winds up in the brokerage’s “default” account, typically a money-market account. Most brokerage firms have accounts that offer better-than-default rates, but only give them to clients who request them; if your sweep account is earning less than 3.5 percent currently, experts suggest asking if the firm can do better for you.
