BrokerCheck hopes to break out in a big way
You check TripAdvisor to get the scoop on where you’re staying and Yelp when you want the lowdown on dinner spot. But how do you check out the broker who may plan your financial future?
BrokerCheck, a free online tool that allows investors to scrutinize their would-be financial adviser, has been available for several years but has largely remained under the radar.
Now, the Financial Industry Regulatory Authority (FINRA), the largest independent regulator for securities firms doing business in the U.S. and BrokerCheck’s creator, is spreading the word with an ad campaign targeting TV, print and social media.
“BrokerCheck is this sort of jewel of information about a registered person’s background, what firms they’ve been involved with, what complaints they’ve had,” says Richard Ketchum, FINRA’s chairman and CEO.
“Whereas you wouldn’t go buy a car without using Carfax or something similar these days, that hasn’t become second nature on the investing side yet,” Ketchum explains. “All of us are so used to checking reactions and reviews for so many things with the accessibility of the Web, but we don’t do it with respect to investments, and with every logic we should be.”
The TV ads, which began airing Monday, make it plain. One shows a bride preparing to walk down the aisle, when instead of the she is greeted with the “Charge” anthem commonly heard at baseball games.
“You wouldn’t hire an organist without hearing them first, so why would you invest without checking BrokerCheck?” the narrator asks.
With FINRA’s online tool, an investor can input the name of an adviser and get an array of information, from the licenses the adviser holds, to disciplinary actions he may have faced, and even his or her personal financial struggles including bankruptcy.
Such knowledge about a financial professional is critical.
“If you’re going to place your trust and confidence in someone that’s going to help you fashion your financial strategy,” Ketchum says, “then understanding her background, and whether she’s moved from firm to firm, whether she’s had a number of complaints ... are important factors you should consider.”
BrokerCheck may not be able to offer details beyond a certain date. And it won’t say if a particular adviser is the best fit for you.
“After doing the initial research to make sure a broker is reputable, investors still need to ask themselves, ‘Is this person designing a plan that is suitable for me?’ ” Ketchum says. “Those are sophisticated judgments you have to make yourself.”