One of the biggest criteria people seek in a professional is someone they can trust. How do
you find that? Unfortunately, there’s no easy answer. If there were a central authority that could give its “Seal of Approval” to only the “good” investment advisors, insurance reps and business consultants, we would provide that information right here. In reality, you need to do some
research on your own, ask the right questions, and rely on your instincts as well.
First, the research. Each profession has its own system. If a professional offers multiple
services, such as stock brokerage, investment advice and insurance, you would want to check each area. For instance, many financial planners may be registered as securities brokers, as investment advisors, as insurance reps, or all three.
Registered Securities Representatives and Stock Brokers, Search Here: http://www.finra.org
Note: The FINRA BrokerCheck system is NOT a reliable check of a broker’s history.
The system shows some customer complaints against a broker. However, just because a customer complained, that does not mean the broker was guilty of actually doing anything
wrong. More worrisome however, is that many instances of actual fraud and misbehavior are
not recorded in the BrokerCheck system for two reasons. One, brokers that settled a complaint with a customer can have the complaint expunged from their record. Ironically, settling the complaint may mean the broker likely did something wrong, but those cases are then erased.
A study by a legal group found that a single broker had more than a dozen complaints erased in just one year after settling with his clients. Second, if the client registers their complaint against the broker’s firm, instead of in the broker’s individual name, it doesn’t show up in BrokerCheck
for that broker.
Registered Investment Advisors, Search Here:
Note: This is a disclosure form which every investment advisor must file with the SEC. It gives
you information about the investment advisor’s firm, including how much money they advise,
what types of fees they charge, and their customer complaint history. However, note that this
form is self-reported by the investment advisors themselves and may not be 100% accurate.
Note: There is no central database of complaints against insurance agents. Insurance is regulated separately by each state. This link (http://www.naic.org/state_web_map.htm)
goes to a map where you can click on your state and it will take you to the insurance commission’s website for your state. Unfortunately, the only resource on the state websites lets you look up the insurance agent’s name and verify that they actually hold the correct insurance licenses in your state; the state insurance sites do not have background checks.
Note: There is no database of complaints against business consultants. You can try looking
them up with the Better Business Bureau at www.us.bbb.org, but most small businesses won’t be listed.