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U.S. Securities and Exchange Commission

Easy Broker Background Check

Q:        A friend recommended a broker to me.  Is there an easy way for me to check out her background before I contact her? 

A:         Yes, Mary, very easy.  Go to nasdbrokercheck.com.  Click “start search” and type in the name of the broker you want to search.  Bingo.  You’ll see a summary of qualifications, employment history, and conduct – all in a matter of seconds. 

You can also ask your state securities regulator – in your case, Mary, the New Jersey Bureau of Securities – to provide you with this information.  Both pull information from the same database – the CRD or Central Registration Depositary.  The only difference?  Investor Ed knows that state securities regulators may provide more information from the CRD than NASD, especially when it comes to investor complaints. 

Q:        What is the rule of 72? 

A:         The Rule of 72 — really just a “rule of thumb” — is a great way to estimate how an investment will grow over time. If you know an investment’s expected rate of return, the Rule of 72 can tell you approximately how long it will take for the investment to double in value. Simply divide the number 72 by the investment’s expected rate of return (ignoring the percent sign). Assuming an expected rate of return of 9 percent, an investment will double in value about every 8 years (72 divided by 9 equals 8).  I’m Investor Ed and that’s all I know. 


We have provided this information as a service to investors.  It is neither 
a legal interpretation nor a statement of SEC policy.  If you have questions concerning the meaning or application of a particular 
law or rule, please consult with an attorney who specializes in securities law.

Modified: 04/16/2007