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Industry Brief

Look Before You Leap: Check Out Your Financial Advisor On BrokerCheck

  • Industry Brief
  • Jan 6, 2017
  • Glenn S. Gitomer
  • By Glenn S. Gitomer

Your life savings are rightfully important to you, and there is no more important decision you will make than the selection of a financial advisor to guide your investment decisions.  Financial advisors are representatives of broker-dealers and/or investment advisors., and important information may be found about them at FINRA’s BrokerCheck.

BrokerCheck® is a publicly available database of information about broker-dealers and registered representatives of broker-dealers and investment advisors.  The information found on BrokerCheck comes from the Central Registration Depository (“CRD”), the central licensing and registration system for the U. S. securities industry and its regulators. A BrokerCheck report on a financial advisor will disclose:

  • Employment history for at least the past ten years
  • Securities licenses held
  • States of registration
  • Current outside business activities
  • Bankruptcy filings within the past ten years
  • Criminal convictions within the past ten years
  • Final actions by any securities regulator
  • Customer complaints within the past ten years
  • FINRA arbitrations involving claims relating to an advisor’s actions
  • Lawsuits brought against an advisor involving investment related matters

BrokerCheck does not address a financial advisor’s skills or make recommendations, but if you see disclosures on you advisor’s BrokerCheck Report, it may give you cause for further inquiry or a reason to be concerned.  For instance, if your advisor has been the subject of customer complaint, the report will tell you the nature of the complaint, whether it was the subject of a FINRA arbitration or civil litigation, the amount of the customer’s claim, whether the matter is pending or resolved, and if resolved, the amount paid to settle the claim or result of the arbitration or litigation.  If the advisor has filed bankruptcy or been the subject of regulatory or criminal actions, it may raise red flags about the stability or integrity of the advisor. 

It is important that you have as much information as possible about the financial advisor, to whom you will be entrusting your hard earned savings. Do not be shy about discussing concerns raised by a review of your financial advisor’s BrokerCheck report with the advisor, the advisor’s employer, your attorney or accountant. The selection of a financial advisor is a matter of great importance, and a time to remember the adage “Buyer Beware.”


DISCLAIMER: Although McCausland Keen + Buckman always strives to provide accurate and current information, the foregoing is intended for general informational purposes only, shall not be construed as legal advice, and does not create or constitute an attorney-client relationship.

Glenn S. Gitomer

about the author

Glenn S. Gitomer

Rated as “preeminent” by a leading survey for more than 25 years, Glenn represents defrauded investors and oppressed shareholders in derivative litigation.

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