The decision to retain the services of an investment adviser – someone who could be investing your hard earned retirement assets – is more important than many of us realize. Naturally, you want to like the person, but more importantly you want to protect yourself against unwittingly committing a portion of your assets to a crook- one who might be the next Bernie Madoff, albeit on a smaller scale. There is a simple resource that we all can avail ourselves of, and that is the Broker Check ® tool on FINRA’s web site.


Taking from FINRA’s web site, the Financial Industry Regulatory Authority (FINRA) is the largest independent regulator for all security firms doing business in the United States. FINRA’s mission is to protect America’s investors by making sure the securities industry operates fairly and honestly. All told, FINRA oversees about 4,275 brokerage firms, about 161,550 branch offices and approximately 629,980 registered securities representatives.”


Through BrokerCheck®, investors can:


• Search for information about brokers and brokerage firms


• Search for information about investment adviser firms and representatives


• Obtain online background reports, if available


• Link to additional resources such as educational tools for investors


The information about brokers and brokerage firms made available through BrokerCheck® is derived from the Central Registration Depository (CRD®), the securities industry online registration and licensing database. Information in CRD is obtained through forms that brokers, brokerage firms and regulators complete as part of the securities industry registration and licensing process. BrokerCheck® features professional background information on approximately 1.3 million current and former FINRA-registered brokers and 17,400 current and former FINRA-registered brokerage firms.


To initiate the search, all you need to have is the name of the adviser and his CRD number. If the adviser you are considering has been reprimanded or dismissed from a firm, you can find it on BrokerCheck®, and such information should dissuade you from moving forward with a relationship.


It would appear that an investment style known as active portfolio management is on the way out. Modern Portfolio Theory holds that it is impossible to out-time or out-manage the market over the long haul; so many investors have simply positioned their investment funds in different investment sectors that appear attractive in the near term. The composition of these funds does not change very much in order that the results of the sector fund will be very close to the performance of the overall sector.


The country’s second largest pension fund in the U.S. is the California Employees’ Retirement System which has over $255 billion in assets. One-half of its assets are already invested in passively managed funds, and the system’s investment committee is seriously considering dumping all of its active managers and moving to an all-passive style.


Would you believe that it might be a good thing if the stock market undergoes a drop in the next few weeks, or in “stockspeak,” a “correction.” According to Kevin Mahn, the president and chief investment officer of Hennion & Walsh Asset Management Company, “I don’t know what it will take to trigger a pullback, but as soon as we get a correction of 3 percent or 4 percent, it will be short-lived because that will be an opportunity for more investors to get in” (to the market).


Apple is about to raise its dividend by one-half or more, according to a recent Bloomberg survey of stock analysts. The word is that Apple will raise its quarterly dividend by 56 percent to $4.14 per share, representing a $15.7 million payout. The resulting yield of 3.7 percent would be greater than 86 percent of the companies in the S&P 500 that pay dividends.


Got a financial planning question for Greg? You may e-mail him at greg@lifesolutionsonline.net


Greg Roberts is a certified financial planner with 35 years of financial and estate planning experience.