Assessment of Skills and Knowledge(ASK) in Fundamental Business Concepts Practice Test

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When searching for an investment broker, what is a critical step to take?

Ask friends for recommendations
Run a background check
Check online reviews
Request their investment plans

The correct answer is: Run a background check

Running a background check on an investment broker is a critical step because it helps ensure that you are dealing with a qualified, reputable professional. This process involves examining their professional history, credentials, licenses, and any disciplinary actions or complaints lodged against them. Engaging with a broker who has a clean background can significantly reduce the risk of fraud and enhance your overall investment experience. While seeking recommendations from friends, checking online reviews, and requesting investment plans can all provide valuable information about the broker's services and reputation, these approaches do not substitute for the thoroughness of a background check. Such a check is essential to confirm the broker's legitimacy and track record in the industry, highlighting its importance in making an informed decision about your investments.