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UNIFORM SECURITY ACT

investing wednesday word of the week Jul 15, 2020

Definition

The Uniform Security Act is model  legislation for securities industry regulation at the state level.  Each state may adopt the legislation in its entirety or it may adapt it (within limits) to suit its needs.

Why It's Important

The USA, as it is commonly called, protects investors from unethical practices.  It also ensures that people that choose to give investment advice are properly registered to do so.  In order to register with the state, a potential advisor has to take a licensing exam, pay fees, and submit the relevant paperwork.  

Does being registered with the state fully protect investors?  Absolutely not!  Registered advisors are sometimes subject to disciplinary action.  It happens all the time!  Your best defense is education!  There are resources such as Broker Check that allow you to see what disciplinary actions if any, were enacted on your current or potential advisor.

If you suspect an advisor is violating the act, you can report them to FINRA, the regulatory body.  It takes a village to ensure we are all safe!

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