Financial Advisor Background Check

Stockbrokers and investment advisors are highly regulated professionals, and accordingly they are required to publicly disclose their backgrounds and negative events related to their professions.  

This information can be found at one of two different regulator sites:  FINRA’s Brokercheck or the U.S. Securities and Exchange Commission’s Investment Advisor Public Disclosure (IAPD) page.

FINRA regulates securities Broker-Dealers and their registered agents which can go by different names such as stockbroker, financial advisor, etc.  Its Brokercheck site includes a significant amount of information on these individuals which should be reviewed before any public customer agrees to hire and rely on the advisor and firm.  Information in Brokercheck includes the various firms the advisor has been registered with over the years, current address location, specific customer complaints, licenses held, bankruptcy filings, criminal history, regulatory actions, and negative financial events such as judgments and liens.  

The customer complaint information is especially important for review as most trustworthy advisors have few or no complaints.  The complaint information will include the date of the complaint, a description of the complaint (such as suitability, securities fraud, churning, negligence, misstatements, unauthorized trading, etc.), whether an arbitration was filed, the amount of claimed damages, and the amount of any settlement or arbitration award resulting from the complaint.

An additional red flag one should consider when reviewing Brokercheck is the status of prior firms with which the broker was registered.  If this includes multiple firms that have been barred from the industry, this is a red flag that customers should consider.

Public customers can also review the broker’s firm for information on arbitration awards against it and regulatory actions filed against it with the results of said actions.  Brokercheck also discloses control persons of the firm and the direct and indirect owners of the firm.

The SECs Investment Advisor site covers individuals and firms that are alternatively registered as investment advisors and their representatives.  The associated disclosures for individuals are similar to the Brokercheck site, but registered investment advisor firms (RIAs) also must submit for public review their form ADV which discloses a significant amount of information about the firm and the business that it engages in.

Some brokers/advisors are dually registered – i.e. they have licenses and are registered on both Brokercheck and the SEC’s IAPD.

The Virginia Securities Fraud Lawyers at Greco & Greco have been representing customers from around the country in FINRA arbitrations and litigation against financial advisors and their firms for decades.  Many of the brokers/advisors we file claims against have multiple red flags on their record showing patterns of wrongful conduct with regard to customers. Furthermore, disclosures of financial problems by the broker may lead to wrongful conduct by the broker in their dealings with their customers, and perhaps the sales of products that should not be recommended due to risk and lack of suitability.

If you have suffered losses due to the misconduct of your financial broker/advisor and their firm, please contact Securities Fraud attorney Scott Greco for a free attorney consultation about your potential case.