I don't know about you, but I am tired of reading about thieves posing as advisors who steal or lose their clients' money. Celebrities are too often the target, but the minute you say, "It can't happen to me," look out, you cannot let your guard down.
According to the Wall Street Journal, about one in every eight brokers has red flags including complaints or other problems disclosed in their regulatory filings. It is caveat emptor since 70,000 brokers have at least one disclosure, nearly 3,000 brokers have at least five disclosures, and they are all out there still working with clients. Don't give these brokers the benefit of the doubt. It isn't worth risking your hard earned savings.
Check Your Broker or Advisor at BrokerCheck
The BrokerCheck search results are presented in a graphical timeline (see below), illustrating a more user-friendly view of the professional's employment status and history, industry registrations, and any reportable events such as customer disputes or disciplinary actions that may have occurred during his/her career.
Be warned, though, that the information on BrokerCheck is largely self-reported. Also be aware that negative disclosure events may have been expunged from a broker's record so read between the lines and look for clues that could be warning signs.
That said, unless you use it, nobody will be saved so please read on.
What To Look For
- Disclosure Events - Look here first for regulatory events, customer disputes, terminations, judgement/liens, bankruptcies. This is your table of contents for potential red flags.
For further research check state agencies (contact info for each state's agency can be found at the North American Securities Administrators Association website.)
A BrokerCheck Timeline You've Got to See to Believe
Happy searching and good luck!
This post originally appeared at the Runnymede Blog.
Please post a comment below to share your thoughts, if this helped you steer clear of potential trouble, or assisted you in hiring an advisor.