How Well Do You Know Your Financial Advisor?

Sad, but true: many of us spend more time researching the latest digital device than a potential financial advisor. That camera may cost you $200. Turning your hard-earned money over to an advisor who doesn’t meet your needs could cost you your life savings.

How well do you know your financial advisor?

  • Has your Financial Advisor ever filed for bankruptcy?
  • Does your Financial Advisor have a criminal record?
  • How many clients have filed complaints against your Financial Advisor?
  • How many clients have successfully sued your Financial Advisor?
  • How much money has been paid in settlements as a result of claims filed against your Financial Advisor?
  • Has your Financial Advisor been reprimanded or sanctioned by the Securities and Exchange Commission, the Financial Industry Regulatory Authority, the National Association of Securities Dealers, the New York Stock Exchange or any state regulator?
  • Have punitive damages ever been assessed against your Financial Advisor?
  • Has your Financial Advisor ever been fired by a former employer?
  • If a former employer fired your Financial Advisor, would you like to know the reason(s) they were fired?
  • Did your Financial Advisor graduate from college?
  • Did your Financial Advisor attend college?
  • Are your aware that Financial Advisors are not required to have attended college?
  • Do you know how many times your Financial Advisor took their licensing examinations before passing?
  • Are you certain that your Financial Advisor is licensed in the state in which you reside?

Would you like the answers to these questions?

If your financial advisor hasn’t provided them, it’s not too difficult to find the information on your own. You just have to do a little legwork.

Most of this information is contained on your financial advisor’s Central Registration Depository (CRD) Report.  To get the report:

  • First, get your financial advisor’s CRD number. Go to: http://www.finra.org/Investors/ToolsCalculators/BrokerCheck/  Follow the instructions and you will have the CRD number in moments. Or you can call the financial Industry Regulatory Authority (FINRA) at 1.800.289.9999.  Provide your advisor’s name and current employer, and you will be given the CRD number.
  • Next, contact your state securities regulator and request a copy of the financial advisor’s CRD Report.  To find your state’s regulator, visit http://www.nasaa.org/about-us/contact-us/contact-your-regulator/. Florida residents can request the CRD Report by sending an e-mail to: Tammy.Thomas@flofr.com.  Remember to include the financial advisor’s      name and CRD number.

How can you use the information contained in the CRD Report?

  • If you have researched your current financial advisor’s background and are satisfied with the results, you don’t have to do anything with the information.
  • However, if you’re unhappy with the results, you can use the same tools to research the background of other potential financial advisors. In addition to researching the backgrounds of employees of full-service FINRA member firms, you might also look into other types of investment advisors, including bank trust departments, independent certified financial planners, online brokerage firms and discount brokerage firms.  You have to decide for yourself how to manage your savings. There is no one best answer. However, information is power.  The more you know, the more intelligent a decision you can make!