Investors can incur major losses from a bad investment, which is why it is crucial to have correct information about what you are investing in. A broker who gives you bad information increases the risk that you will buy into something that will cause you to lose a substantial amount of money. Some Florida brokers intentionally misrepresent themselves and conceal information about an investment, which can greatly cost an unsuspecting investor.
As explained by U.S. News and World Report, investors should watch out for brokers who try to quickly push you towards an investment. The pitch may be that the investment is attracting a lot of people, so you should get in on the action quickly. Shady brokers may also claim the investment offers guaranteed profits. Reputable brokers do not make such promises, as any investment is bound to have some level of risk.
It is also important to make sure you know which investments are right for you. A shady broker may try to push an investment on you without providing a lot of details. Sometimes an investment is so complicated that it is hard to understand. Con artists may attempt tactics like charm or offering free lunches and/or swag to convince you that they know what they are doing, but there is no substitute for solid information about what you are investing in.
Also be aware that your stockbroker must be properly credentialed. Unscrupulous brokers may talk a good game about their credentials and experience, but in reality, they may not possess the right qualifications. The SEC warns that some shady brokers lie about their education or claim to hold honors or professional titles that they do not possess. Some brokers also exaggerate their level of experience.
A broker may try to assert credibility by claiming to have made appearances on television. It may be true that a broker has appeared on cable television or has used legitimate media to speak about financial matters, but this is not proof of the broker’s qualifications and experience. It is possible for television producers to not catch on to a broker who provides misleading background information or lies about previous financial experience.
Stockbrokers who defraud investors may be held liable for their actions. Consulting with an attorney may be a benefit if you suspect a broker has not been honest with you about an investment.