National News
Background checking before investing should always be advised
October 31, 2016 posted by Steve Brownstein
It may seem like common sense to know who you are investing your money with, but it is quite often how people do not conduct simple background checks on their investment advisers. Perhaps they don’t know how.
Anybody who is securities registered has a record that’s easily viewed online.
Does your investment adviser or broker have a lot of customer complaints? Has she had a lot of personal financial problems like liens, judgments or a bankruptcy? Has he even had some criminal complaints? You might want to know all these things, and it’s all readily available.
The public record will list things like licenses held, years in the industry, employment history, etc., but one of the things most people are really interested in is called “disclosure events.” As per FINRA’s own wording: “All individuals registered to sell securities or provide investment advice are required to disclose customer complaints and arbitrations, regulatory actions, employment terminations, bankruptcy filings and criminal or civil judicial proceedings.”
On FINRA’s home page is a box called Broker Check. You can input the name of anyone who is securities registered or any broker dealer in that search box. Once you find the person or firm’s name, you can select it and a summary record will appear that gives you basic information. You can download a PDF of a full report, which gives much more detail.
There is no reason not to check this report before working with anyone who is securities licensed.
