Return to Blog

Checking a Broker’s Background Gets a Mandatory Link

FINRA, the regulatory authority for stock brokers and investment advisors, has recently approved a new rule requiring brokers to place a link on their webpage to connect the retail client to the FINRA broker check website. The FINRA broker check site provides professional background checks on advisors, disclosing client complaints and professional disciplinary actions against the advisor. The link, unfortunately, is not required to take the viewer all the way to the broker’s background. Instead the viewer will need to enter the brokers name or registration number in order to see the report.

Trust But Verify

When searching for your first or new advisor, getting his or her professional background is important. While choosing an advisor is a lot about trust, the background check should be done to verify that your initial impression is correct. I was recently trying to win a client from a large national broker. After looking at the expensive mutual funds being used in the portfolio I did a broker check on the advisor to learn that he had over 16 complaints filed against him over the last few years. All basically indicated that he was an aggressive salesman, promising success verbally that would be hard to obtain, while in writing promising nothing. Looking at the prospects clients’ portfolio, I quickly saw that this non-fiduciary advisor had sold her the most expensive funds in the industry. While, maybe he was a nice guy, his background check indicated that he was not to be trusted with client money.

Searching is Easy

Anyone can do a broker check search by going to http://www.adviserinfo.sec.gov/. Once on the site, you can search by individual or firm. As an example, you can type in my name, Casey Tyler Smith in Zip Code 30060 and hit Search. In the top right, you can select a detailed report. You should do this if the answer to the disclosure information at the bottom of the page is “yes.” The detail report will shine a light on any advisor complaints, fines and the outcome.

Desired Outcome

If an advisor has been doing business long enough, there may have been a client incident at some point, so just because there is one does not automatically make for a bad advisor. Filing a complaint against an advisor is not necessarily an easy process, thus you have to feel very frustrated or hurt by the advisors sale of a product to want to go through the steps. So a disclosed event should not be taken lightly either. What you do not want to see is a situation like I described above where there are regular complaints. These are the advisors you should stay away from. Ultimately you want to work with an advisor that is a fiduciary (works in your best interest) and works under the fee-only (not fee based) model. While these advisors are historically hard to find, they are becoming more popular as the general public begins to recognize that banks and brokerage houses are selling them products that are not built in their best interest.

You can access Casey's and/or Wiser's latest report here.


Have more questions? Email us at [email protected] or use the Contact Us page.

Wiser Wealth Management, Inc. is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.

Happy Birthday to Kylie, our Marketing Assistant! Kylie works hard behind the scenes on our website, podcast, social media, and so much more.

Meet Daphne, our Financial Planning Intern. She is studying Finance at The University of Georgia. We are excited she's joined us for the summer!

https://conta.cc/3Ov1Fub

Your Medicare premium is affected based on which tax bracket you fall within after age 63. IRMAA is your income-related monthly adjustment amount. Watch today's video to learn more about how IRMAA works.

https://conta.cc/3zK9WGw #irmaa #medicare

The big question is, will we have a recession in 2022? Watch this video to find out!

https://conta.cc/3Mz2z7D #recession2022 #recession
https://youtu.be/45TvHaZf4z4#recession2022

Happy birthday to LJ our Video Production Manager! LJ works behind the scenes producing all of our podcasts and videos that we post every week. 🎉

Company

Services

Client Access

Firm Information

Schedule a Meeting
678-905-4450[email protected]
Google Rating
5.0
Based on 71 reviews
js_loader