The Advocates: Full Disclosure

Avoid being Madoff’d with an online service that reveals all about your broker

Even with financial reform legislation on the horizon, scams and fraud continue to thrive, often at the hands of the people entrusted with investors’ money. If you’re planning to invest or already use a broker’s services, perform a background check on your adviser with BrokerCheck, a free online service made available through the Financial Industry Regulatory Authority (FINRA), an independent nonprofit agency that governs the activities of security firms. Besides listing any customer complaints or civil suits filed against the adviser, the report, in a tidy, printable PDF document, also contains important credentials, including current registrations, previous employment history, outside affiliations, and states where the adviser is licensed to do business. FINRA.org/BrokerCheck  

BRIGHT IDEA: Avoid lifestyle inflation by pretending that pay raise didn’t happen

When good fortune and hard work yield income gain, expenses often increase at the same rate. To combat this “lifestyle” inflation, try living in the past, one pay raise behind. If you take home $4,500 a month and receive a $300 net pay raise,  continue to budget as you had before the raise, and set up an automatic transfer of the $300 to your savings. By year’s end, that $3,600 will help pay off credit card debt, boost that emergency fund, or make a nice contribution to your Roth IRA.

Free for All
The ads for free credit reports aren’t the whole truth, but you can get what they promise -- elsewhere

One can simultaneously loathe and get sucked in by irritating advertising. The FreeCreditReport.com commercials are a prime example. While few would admit enjoying the asinine ads, it’s likely that many viewers will have pulled up the website hyped by its lip-synching, guitar-strumming pitchmen promising a free financial service. FreeCreditReport.com requires users to sign up for a free trial membership -- the catch is that users incur a recurring monthly fee if their account isn’t canceled within nine days. Your credit report is free -- actually, truly free—if you look elsewhere. In 2003, Congress mandated that the major credit bureaus provide a free credit report every 12 months to consumers who request one. AnnualCreditReport.com is the site set up by law to provide free access to the sites of the three major credit reporting agencies -- Equifax, Experian, and TransUnion. Once on those three agency sites, you can review and print your report, and challenge erroneous negative reports with online systems that are simpler than the old snail-mail ones. Why all the fuss about tracking credit? Credit reports affect matters as varied as your car insurance premiums and interest rates on mortgages, so keeping tabs on your credit is vital.