Consumers learned to invest at ‘Investor Bootcamp’

The Alliance for Investor Education (AIE) sponsored a free event for investors in early December. During the afternoon, AIE members, federal and state regulators and consumer advocates participated in three panels to help attendees learn to set investing goals, assess risk tolerance, select advisers and investments, and avoid falling victim to fraud. The public event featured representatives from the Investor Protection Trust, CFP Board of Standards, CFA Institute, FINRA, The Public Investors Arbitration Bar Foundation, the American Association of Individual Investors, the Investment Company Institute Education Foundation, Consumer Action and the U.S. Securities and Exchange Commission (SEC) Office of Investor Education and Advocacy.

“There’s an opportunity for everyone to become an investor,” said Consumer Action’s Linda Sherry. “I firmly believe that having a good investment professional, having a good adviser, is key.”

Sherry went on to advise listeners to find a representative who is a “fiduciary”—a professional who is obligated to act in the investor’s best interest. But not just any fiduciary will do, said Sherry, because “you’ve got to check them out” using available resource like FINRA’s free BrokerCheck, the Securities and Exchange Commission’s Investment Adviser Public Disclosure database, and information available from your state insurance regulators. Also, make sure the firm is a member of the Securities Investor Protection Corporation (SIPC), which protects against the loss of cash, stocks and bonds held by customers if the member brokerage firm fails.

Sherry also advised attendees to find a financial planner with a trustworthy professional designation. “There are many designations, and some aren’t worth placing your trust in,” she noted. To learn more about the designations you might encounter when seeking a financial planner, Sherry recommended FINRA’s professional designation lookup tool. (Note, though, that FINRA does NOT officially approve of or endorse any professional credential or designation.) Sherry said she finds the Certified Financial Planner (CFP) designation issued by the Certified Financial Planner Board of Standards to be one of the more robust certifications. Learn more at the CFP Board website.

Sherry suggested that beginning investors also check out “robo-advisers” offering automated investments programs. These advisers can cost less and require smaller minimum investments than full-service brokerage firms. NerdWallet compared well-known robo-advisers last year. “But all my standard caveats for doing your due diligence still apply,” Sherry added.

Live videos of all three of the Bootcamp panels can be found on the Alliance for Investor Education website.