If you have decided you want to work with an investment adviser, take time to perform due diligence background checks. After all, as you will be putting your finances and future security in this specialist’s hands, you need to know about the individua’sl or firm’s operations, work history, and professional designations. Fortunately, the internet has made background research simpler than in times past. These are ways you can research investment advisers before you sign on the dotted line.
Begin your research by checking out the Form ADV for money professionals. This comprehensive disclosure statement gives you important information about advisers, including background history, previous complaints, fees and compensation, current operations, and asset holdings. The U.S. Securities and Exchange Commission requires financial specialists to file this document. These forms are available on the Investment Adviser Public Disclosure, or IAPD, website for free.
Some money professionals are overseen by the Financial Industry Regulatory Authority, or FINRA. Use FINRA’s BrokerCheck service to research these individuals and firms. This database lets you do checks for previous complaints as well as other industry information.
• Status of registration
• Past regulatory disputes or events
• Professional exams
• Previous employment or clients
• Mergers, acquisitions, and name changes
BrokerCheck may redirect you to the IAPD website for more information.
SEC Adviser Search
The SEC oversees other financial specialists. In this case, you can use the SEC’s Adviser Search feature to look up individuals and firms. Some investment managers are overseen by both agencies. Look on both BrokerCheck and the SEC’s Adviser Search in this instance.
The internet is a treasure trove of useful information such as analysis from industry insiders on money professionals. For example, a review, such as Fisher Investments’ shown here, can give you valuable insights on how particular investment specialists like to operate and how other industry authorities view them. In this case, you can gain a useful understanding of how independent money manager Fisher Investments does business.
State Securities Regulators
You can check on money advisers and brokers who are registered with your state at the North American Securities Administrators Association, or NASAA, website. This site also has other educational tools for investors who want to learn more about the industry. This is always valuable, even if you work with a financial professional, because the more you know, the better the questions you will be able to ask your adviser.
BrightScope is a financial information website that lets you check out investment pros. This database will tell you about designations and licenses, agency registrations, and other professional information. This site also features money news that can help you increase your understanding of the industry.
Choosing a financial adviser should not be done lightly. It is an important decision, but the internet makes researching professional backgrounds convenient and simple. From reviews to databases, you can learn key details about investment advisers that can help you make a good hiring decision. You will be working with this individual or firm for a long time, and choosing well, in the beginning, will make managing your finances less of a burden and more of an adventure.