Check Writing Policy Protects Your Money
You may have noticed that when you want to make an investment, you typically send a check to your financial advisor, who processes the transaction on your behalf. Whenever you send a check, make sure it’s written directly to the product sponsor (such as the mutual fund or annuity company where you’re investing) or to the brokerage firm that’s holding your investments for you (such as Royal Alliance or Pershing).
- The check is drawn against a U.S. financial institution, in U.S. dollars.
- The check is made payable to the appropriate fund or annuity, or to your brokerage account.
- It is not a third party check. If you wish to invest a check you received from someone else, you must deposit that check into your own checking account and write a new check made payable directly to the appropriate fund or annuity, or to your brokerage account.
- The maker of the check matches the title on the investment account. (This can cause problems when a woman marries and changes her name but not her checks!)
- Advisors can’t accept cash, money orders, travelers checks, double endorsed checks, cashiers checks under $10,000 or other non-traceable financial instruments under any circumstances.
It’s not uncommon for investors to feel they are being punished because of all these restrictions. But it’s important to remember that these rules were created to protect your investments from fraud or theft.
Therefore, before you send a check to your mutual fund, brokerage account or financial advisor, call first to make sure that what you’re sending is in an acceptable form. This can save you a lot of time and aggravation. For more information, contact your advisor.