How to Check the Credentials of a Financial Advisor

If you are like most people, before you go out to dinner at a new restaurant, you probably take a quick look at the reviews. This makes sense; you are going to pay for an expensive dinner, and you need to be sure that you are getting a good value.

Yet, when it comes to choosing a financial advisor, all too many people fail to conduct this same level of due diligence. Before turning over access to your money, you need to be sure that you have found a financial advisor that you can trust. Here, our investor protection team explains how you can check the credentials of a financial advisor.

State Licensure Records and SEC Investment Advisor Search

You should always take a look at the licensure records for your individual state. For example, if you are investing with a financial advisor who is based in Florida, you should refer to the Florida licensee search tool, which is maintained by the Florida Department of Financial Services. Similar tools are offered by other states. Through this, you can verify basic background information about a financial advisor.

Additionally, if you are working with an advisor who has $25 million (or more) under management, then they are required to register with the Securities and Exchange Commission (SEC). The SEC offers an Investment Adviser Public Disclosure search tool, which is also useful to verify background information.

BrokerCheck

It is best to choose a financial advisor who is registered with the Financial Industry Regulatory Authority (FINRA). To be registered, these securities representatives must meet certain qualification standards. FINRA issues all registered brokers a unique Central Registration Depository (CRD) number.

You can enter this number into FINRA’s BrokerCheck tool to access extensive background information about the financial advisor, including the past history of investor complaints that have been filed against the broker or their member firm.

Ask About Their Background

Finally, informal search tools can be very useful as well. You can and should ask about a financial advisor’s background. Learning where they went to school and how long they have been working in the industry can be helpful in assessing whether or not this advisor is the right person for your unique needs.

It is always a good practice to cross-reference what you discover, using tools like social media and internet research to help you verify this basic information. If you find any type of deception from the financial advisor, or if you discover anything else that makes you uneasy, it is best to choose a different financial advisor. There are many options available.

Were You a Victim of Financial Advisor Fraud?

We can help you file a complaint against your financial advisor. At Sonn Law Group, we dedicate our practice to advocating for the rights of investors. If you lost money due to the negligence or fraudulent actions of a financial advisor, please contact our legal team today to set up a free review of your claim. From our primary office in South Florida, we represent investors nationwide.