How To Use BrokerCheck To Evaluate A Financial Advisor’s Credentials
What is BrokerCheck?
BrokerCheck is a tool any investor can use to research a financial professional or firm. This tool enables individuals to complete a thorough background check on financial professionals like brokers, brokerage firms, financial advisors, investment advisors, advising firms, etc. The detailed information provided through the BrokerCheck tool includes their employment history, certifications, licenses, and active or past violations within the last ten years so that you can make an informed decision while hiring an advisor.
You can use the Brokercheck tool on the FINRA website. The Financial Industry Regulatory Authority (FINRA) is a private corporation that regulates firms within its system and website. The Securities and Exchange Commission’s (SEC) website is also beneficial in gathering details on investment advisors and firms.
What Information Does FINRA BrokerCheck Provide?
BrokerCheck provides the following:
- Brief Overview: A brief overview of an advisor or broker’s employment information and credentials.
- Qualifications: The advisor or broker’s qualifications including licensing, exams passed, and where the financial professional is registered.
- Employment History: Mentions where the broker or advisor currently works and provides info regarding employment history for the previous ten years, including any work experience outside the brokerage industry.
- Disclosure Notices: Information regarding whether the financial professional received disciplinary actions, consumer complaints, or if any criminal felonies were committed or charged. Some of this information can relate to ongoing legal proceedings or unresolved or unproven allegations. In addition, recently submitted comments on these issues provided by the broker or advisor may also be included.
Use the step-by-step guide below to begin using BrokerCheck to evaluate financial professionals:
Steps-by-Step Guide To Using BrokerCheck
1. Go to the FINRA BrokerCheck Website:
To begin accessing a BrokerCheck report for an individual or firm, visit the BrokerCheck website. Here you will enter information about the financial professional or firm.
2. Input the Broker’s Information
Once on the BrokerCheck website, insert the advisor name, firm name, or Central Registration Depository (CRD) number, which you can locate on the advisor’s profile on the WiserAdvisor directory. After inputting the information, click SEARCH.
3. Review The Report
On the first page, you will receive a preview of the broker/advisor/firm’s report, including their name, firm name, disclosure information, years of experience, and more.
3a. To receive further detailed information on your advisor, select the “More Details” button to generate a report summary.
3b. If your advisor/firm is a broker, you will find detailed information regarding your advisor through BrokerCheck. You will know whether the professional/firm you searched for is a broker if “Broker Regulated by FINRA” is highlighted in dark blue as shown in the image below.
3c. If your advisor/firm is not a broker, you will be redirected from the BrokerCheck website to the SEC website: https://adviserinfo.sec.gov/
4. View Report Summary
On the next page, you will find a detailed summary of the financial professional/firm’s BrokerCheck report. This summary will include information such as employment history, disclosures, years of experience, exams passed, examination results, licenses, and registration history.
5. Download or Share Report
After reviewing the summarized information, if you wish to download or share your financial professional/firm’s complete detailed report, click the corresponding links in the top right corner.
Finding the right financial advisor or firm is critical for the success of your future financial plans. In order for you to reach your financial goals, it is recommended that you try to hire an advisor or firm that would work in your best interest and be trustworthy. Therefore, it is essential for you to spend time comparing and researching advisors in order to get a good sense of their credibility and performance.