The Safety of Brokerage Accounts
Don't fall victim to scams and online hackers. Every well-intended endeavor is usually followed by people trying to agitate and sometimes destroy it. Opening a brokerage account is only the first step in establishing an investor's identity, but protecting that account is crucial to maintaining a long and secure investment portfolio.
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Brokers: What Can They Do for Me?
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Every day, people see stock brokers offering business solutions and supposedly great investment ideas to help any aspiring investor. There are different types of brokers that render services depending on the investors needs. There are full-service brokers, that provide their expertise to clients that either don't have the time or knowledge to oversee their account. These services usually include, research and advice, tax tips, retirement planning, and much more at a premium price. Discount brokers usually limit their services to carrying out buy and sell orders for their clients.
Make Sure Your Brokerage Firm Is Compliant
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Brokerage firms in the United States are regulated by several government agencies. The Securities and Exchange Commission is charged with overseeing the stock market with an emphasis on preventing corporate abuse as it relates to the sale of company securities. The Federal Deposit Insurance Corp. simply provides safety of deposits by insuring the brokerage firms. Although not a federal agency, the Securities Investor Protection Corporation protects investors from failed brokerage firms in the form of insurance for the account holder.
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Close the Door on Hackers
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Make sure your brokerage firm provides encrypted communications and secure identification of their network. You can identify this by looking at your web browser when logging into your brokerage account. If your web browser says HTTPS, then you are operating on a secure network. Another security measure is to use unfamiliar passwords. Avoid anything that can be easily associated with you such as birthdays, anniversaries, middle names, and addresses. On top of typing in your password, most brokerage firms also require users to identify their site-key. A site-key is usually an image that was selected when the account was created.
One Last Security Measure
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The last and most important safety measure is you. The attentiveness of the account holder is imperative in providing adequate protection for his brokerage account. Check the account balance daily to make sure the activity in the account was initiated by you or your broker. Make sure your account is optimized to send email alerts whenever there are changes made to the profile settings or contact information. No matter what measures have been taken by the government and brokerage firm, the account holder should always be the ultimate safeguard for the brokerage account.
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References
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