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Ask and Check

At a recent conference I attended, a representative from the SEC (the Securities and Exchange Commission, not the other SEC) presented on the topics of financial literacy and education for investors. This is familiar ground for the SEC, but I found the presentation style and directness refreshing. This is the actual presentation, but I want to pull out a few interesting pieces for special attention.

The presenter, Kathy Floyd, Deputy Director for Investor Education for the SEC, began by laying out some of the deficiencies in financial literacy. Generally, people

  • Don’t understand basic concepts (e.g., compound interest) or other key financial concepts (e.g., diversification)
  • Aren’t aware of investments costs and their impact on investment returns
  • Lack critical knowledge about investment fraudand
  • Certain subgroups generally perform worse than average

These points were from a report that the Library of Congress created for the SEC as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The report is a basic literature review of financial literacy research from the past few years.

Using the report as a basis, the SEC worked to develop programs promoting:

  • “Ask and Check”
  • Awareness of the fees and costs
  • Investor.gov as the primary federal government resource for investing information

Of the three, I found “Ask and Check” to be the most interesting. Investors are encouraged to “ask” the investment advisers soliciting business how they are registered. Investors can then visit SaveandInvest.org and follow a link to the FINRA online service: BrokerCheck. It allows an investor or other curious person to “check” individuals (brokers and investment advisers) and firms to investigate their securities licensing, employment history, criminal history, and more.

The following table provides a more comprehensive list of how to “check” investment professionals, including insurance agents.

Professional Check URL and Phone
Investment
Professional and
Product
State Securities Regulators – check
North American Securities
Administrators Association (NASAA)
www.nasaa.org
(202) 737‐0900
Investment
Adviser
U.S. Securities and Exchange
Commission (SEC)
www.sec.gov
www.investor.gov
brokercheck.finra.org
(800) SEC‐0330
Broker FINRA BrokerCheck www.SaveAndInvest.org
brokercheck.finra.org
(888) 295‐7422
Insurance Agent State Insurance Regulators – check
National Association of Insurance
Commissioners(NAIC)
www.naic.org
(866) 470‐6242

SaveandInvest.org also provides a link to a financial designation lookup tool. This allows for investors to easily compare the many designations that a financial professional might hold. The tool allows for an easy comparison between the CFP, CRC, and CFA designations.

Finally, the presenter mentioned that there is no copyright on the materials developed by the SEC. This allows for easy adaptation for whatever the need is in your community, classroom, or place of work. Check out Investor.gov and SEC.gov to find materials that you can adapt and use.