Ten Tips for Online Investors

When You Invest Online, Be Sure To:

  1. Receive full disclosure, prior to opening your account, about the alternatives for buying and selling securities and how to obtain account information if you cannot access the firm's Web site.
  2. Understand that most likely you are not linked directly to the market, and that the click of your mouse does not instantly execute the trade.
  3. Receive information from the firm to substantiate any advertised claims concerning the ease and speed of online trading.
  4. Receive information on the firm's Web site about significant outages, delays and other interruptions to securities trading and account access, and how to proceed under these circumstances.
  5. Obtain information before trading about entering and canceling orders (market, limit and stop loss), and the details and risks of margin accounts (borrowing to buy stocks).
  6. Determine whether you are receiving delayed or real-time stock quotes and when your account information was last updated.
  7. Review the firm's privacy and Web site security policies and whether your name may be used for mailing lists or other promotional activities by the firm or any other party.
  8. Receive clear information about commissions and fees and conditions that apply to any advertised commission.
  9. Know how to, and if necessary, contact a customer service representative with your concerns and request prompt attention and fair consideration.
  10. Contact your state securities agency to (1) verify the registration/licensing status and disciplinary history of the online brokerage firm; (2) find out if the investment is permitted to be sold; and (3) file a complaint, if necessary.

Iowa Securities Bureau
601 Locust St. - 4th Floor
Des Moines, IA 50309-3738
515-281-5705

iowasec@iid.state.ia.us

Prepared by the North American Securities Administrators Association

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