Tuesday, November 12, 2013

BrokerCheck: Researching Your Investment Professional

"I had a very strong work ethic. The problem was my ethics in work."
- Giovanni Ribisi as Seth Davis in "Boiler Room"

How can you find out if your securities broker or other investment professional is a straight shooter or an extra from the movie "Boiler Room"?  There is no substitute for thorough due diligence, and a great place to start such research is FINRA's BrokerCheck.  FINRA stands for the Financial Industry Regulatory Authority, an independent organization that regulates the securities industry.
FINRA's website homepage (www.FINRA.org) includes the BrokerCheck feature.  BrokerCheck is a terrific (and free!) online tool which allows users to conduct a background check on investment firms and investment professionals, such as brokers, brokerage firms, investment advisers and investment adviser firms. By inserting the name of an investment professional or their firm name into the BrokerCheck dialogue box, users can access information such as:

  • is this person registered and a broker or investment adviser with the SEC, any self-regulatory organization or one or more states?
  • how long has this person been registered?
  • which securities firms has this person been affiliated with and what is his or her employment history for the last 10 years?
  • has this person had any "Disclosure Events," such as customer complaints, arbitrations, regulatory actions, employment terminations, bankruptcy filings or criminal or civil judicial proceedings?
  • has this person passed any state or federal securities industry exams? 
To the extent the investment professional or investment firm has been involved with one or more reported Disclosure Events, users can review the allegations made against the professional or firm, the status of the claim, and a summary of how the matter was resolved.

Special thanks to John Fahy for bringing to my attention the news that FINRA recently released an enhanced version of BrokerCheck which is more user-friendly.   

No comments:

Post a Comment