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How To Do A Background Check On Your Financial Pro

By newadmin / Published on Tuesday, 06 Feb 2018 23:26 PM / No Comments / 10 views


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How much do you know about the people offering advice about your money — or even hands-on managing it? Consumers have access to a lot more information about a financial pro than what’s presented in a brochure or mentioned during a meet-and-greet.

Here’s how to find out all you can before handing over your hard-earned dollars.

Research a broker

People or firms who handle investment transactions (buying or selling securities such as stocks, bonds, mutual funds and other investment products) are considered “broker-dealers.” They are required to register with the Securities and Exchange Commission as a registered representative and also be members of the Financial Industry Regulatory Authority.

Using FINRA’s BrokerCheck tool, individuals can research whether a person or firm is registered to offer investment advice and/or sell stocks, bonds, mutual funds and other investments. This database shared between the SEC and FINRA generates a free report detailing licensing information, employment history and any actions that have been taken against a broker. Disciplinary actions issued in 2005 or later are also available at FINRA Disciplinary Actions Online database.

State regulatory agencies also maintain databases of enforcement orders and judgments. The North American Securities Administrators Association provides an alphabetized directory to each jurisdiction’s website.

Check out an investment advisor

Investment advisors can go by many names, including asset managers, portfolio managers, wealth managers and investment counselors. What they have in common is that they provide specific investment advice to clients. (Before you hire one here are 10 questions to ask.)&nbsp;

Advisors who manage $110 million or more in client assets are regulated by the SEC and are part of the FINRA’s BrokerCheck database. Investment advisors who manage less than that must, at a minimum, register with the state security regulator. (Use NASAAs state regulator directory, linked to above, to get details.)

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Shutterstock

How much do you know about the people offering advice about your money — or even hands-on managing it? Consumers have access to a lot more information about a financial pro than what’s presented in a brochure or mentioned during a meet-and-greet.

Here’s how to find out all you can before handing over your hard-earned dollars.

Research a broker

People or firms who handle investment transactions (buying or selling securities such as stocks, bonds, mutual funds and other investment products) are considered “broker-dealers.” They are required to register with the Securities and Exchange Commission as a registered representative and also be members of the Financial Industry Regulatory Authority.

Using FINRA’s BrokerCheck tool, individuals can research whether a person or firm is registered to offer investment advice and/or sell stocks, bonds, mutual funds and other investments. This database shared between the SEC and FINRA generates a free report detailing licensing information, employment history and any actions that have been taken against a broker. Disciplinary actions issued in 2005 or later are also available at FINRA Disciplinary Actions Online database.

State regulatory agencies also maintain databases of enforcement orders and judgments. The North American Securities Administrators Association provides an alphabetized directory to each jurisdiction’s website.

Check out an investment advisor

Investment advisors can go by many names, including asset managers, portfolio managers, wealth managers and investment counselors. What they have in common is that they provide specific investment advice to clients. (Before you hire one here are 10 questions to ask.) 

Advisors who manage $110 million or more in client assets are regulated by the SEC and are part of the FINRA’s BrokerCheck database. Investment advisors who manage less than that must, at a minimum, register with the state security regulator. (Use NASAAs state regulator directory, linked to above, to get details.)

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