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Clark Howard's Tips

Brokerages required to send you info about stocks

July 26, 2004

Over the years, the calls Clark has received regarding investing have increased and changed in tone. In part, that is because most of us have to fund our own future. Many people used to receive a pension from our work when they retired, but that doesn't happen nearly as often anymore. People must invest the money they earn wisely in order to plan for their retirement.

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Find more consumer advice in Clark Howard's book, "Get Clark Smart"

In recent years, brokerages have been lying to customers — by lying to their brokers — about the performance of certain stocks. The brokers, often without realizing it, were suggesting crummy stocks and people were losing their hard-earned money. It was all to help line the pockets of the big wigs at these brokerages.

But this unethical practice is about to stop. The big brokerage houses recently reached a settlement with the government that requires brokerages to tell you what their company and what other companies know about a stock.

The new law goes into effect July 27. They'll still be trying to sell you certain stocks, but you'll be mailed information about that stock and how it is performing.

So, it's up to you to confirm whether they are telling you the truth. Sending you the information won't matter unless you read it.

More Clark Howard Money Management Tips