Overview

Investment scams and deceptive sales practices can be a problem these days. But you can protect yourself by doing “due diligence” before purchasing a financial product or service.


Due diligence has two parts. The first is making sure your advisor is properly licensed, hasn’t run afoul of regulatory authorities, and isn’t a felon. The second is asking questions about the person’s training, business practices, and compensation methods. Asking for referrals from current and prior clients is also a good idea.

National Ethics Bureau provides free resources that help you do your initial due diligence. These include:

• A Verification Hotline for checking the background of any NEB member (800-282-1831).
• A regulatory agencies list if you wish to check out a prospective advisor yourself.
• Ability to purchase a background check on a non-NEB member prior to doing business. Our Ethics Check System™ is a comprehensive series of background checks designed especially for the financial services industry.
• Ability to search for National Ethics Bureau members in your area. These professionals have already passed the Ethics Check System™ and have agreed to uphold NEB’s membership standards and Ethics Pledge.
• Consumer publications, including our Scam Report and Consumer Protection Guides.

Once an advisor passes your initial screen, be sure to ask further questions about the person’s training, business practices, and compensation methods. By learning as much about the person as possible, you will be able to do business with confidence.