Disclosure

Disclosure. Under the rules governing their behaviour, your stockbroker is required to tell you if he holds any shares in the company he is recommending you put your hard-earned money into.

In other words, brokers must disclose any financial interest in securities they're making recommendations about. If the broker actually hold shares in the company he's recommending, you'll want to know about it. Similarly, if the broker is acting as advisor to that company, you'll also want to know about it!

An unethical broker may promote shares to you (and everyone else) strongly so as to force the price up. Then, he would sell his own holding netting a profit. Most stockbrokers are of course highly ethical no doubt!

See Also: Online share dealing service Stockmarket Centre

Last Updated: June 2007 © Moneyextra.com

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