America’s SRO for brokers is urging investors to review their account statements, in an effort to make clients more aware of errors or misconduct by brokers or firms, including transgressions such as unauthorized trading or overcharging customers for handling transactions.

FINRA has issued an ‘Investor Alert’ called It Pays to Understand Your Brokerage Account Statements and Trade Confirmations, in order to help guide investors through the key elements of their account statements and trade confirmations.

“Investors whose portfolios have taken a hit might not be keen to open their account statements, but investors should review their statements carefully and immediately call the firm that issued the statement about any fee they do not understand, or transactions they don’t [recognize],” said Gerri Walsh, vice-president for investor education of FINRA. “Investors should also review trade confirmations because a single keystroke can make the difference between 100 and 1,000 shares.”

In most cases, brokerage firms provide customers with quarterly account statements and written notification of trade confirmations at or before completion of a transaction, as is necessary.

The new FINRA alert details in plain language the key elements of these account statements, as well as the “red flags” that aid investors in both spotting and averting problems.

Many account statements include an investment objective that characterizes an investor’s strategy, such as “growth” or “conservative”, and all investors should ensure that this description, as well as the account activity, accurately reflects their goals and risk tolerance.

Consolidated account statements, which provide customers with a single document that combines information from most or all of their financial holdings, are also growing in popularity.

Investors must understand that these statements only supplement the required brokerage account statement—they should not and do not replace it.

Investors who receive both kinds of statements should be aware that the official brokerage statement is used in the event of a dispute with the broker or firm.

The investor alert explains that trade confirmations disclose information whether your broker acted as an agent for you, or whether the firm acted as a principal for its own account.

If the firm acts as an agent in an equity transaction, it must then disclose the commission charged to the client either on the confirmation slip or upon request.

If the firm acts as principal, however, it’s acting for its own benefit and any markup, markdown or commission-equivalent must be disclosed on the confirmation.

Investors who find inaccuracies or discrepancies on any of these statements are advised to contact their broker or firm immediately to resolve the problem, and if a solution is not reached, are urged to file a complaint with FINRA.