If you are going to trust your financial future to someone or place all your hard-earned money into someone else’s investing power, you may want to know something more than the name of the company or firm that person works for. While doing an internet search can yield instant results, it can also leave you scratching your head in confusion. Before you believe your advisor is not registered or is someone you can’t trust, make sure you have all the information you need to establish who the person you are looking for really is. Sometimes there is too much information available on too many people, and it can be confusing. Here are three tips to help you understand how to check your financial advisor’s credentials.
1. The Regulations
All financial professionals are responsible to multiple governing organizations. Which type of body governs your advisor is dependent on the business, firm, or company he or she works for. If it is a broker or dealer, the Financial Industry Regulatory Authority is the supervisory body, while if your advisor is a registered investment personality, the Securities and Exchange Commission or the resident state is the responsible committee. Since there is confusion over the difference between a financial or investment advisor, there is no official governing body or regulation about the title’s use.
2. The Internet
You are probably aware of how quickly the tide can turn against a person when one client doesn’t like a product or service. One article can bring down a company, just as one blog post can go viral and destroy the reputation of a person or business. For this reason, what folks say about the advisor should be taken with a grain of salt. There are a million reasons you need to do your own investigation into what you will believe rather than listening to what others are regurgitating from other sources. You are the only one that can decide if a person is trustworthy enough from past experiences to handle your money.
3. The Unknown
If you are searching for information on the advisor and are unable to locate anything, there are three possibilities why you are having problems. First, you may be looking for an advisor in the wrong place. The FINRA, RIA, and SEC are very different regulatory authorities. If you check all three places and still can’t find him or her, call the office and request the necessary information to locate the advisor. The office should be willing to provide you with all the information you need. The second problem you may face in trying to locate data about your advisor is that they may not be registered with any of the legally required entities listed above, and this is a huge red flag to step away from that advisor. The third problem you may have in locating the advisor is that you possess incomplete information. You may have the wrong spelling of a name, the wrong location, or his or her CRD number can make you believe they aren’t listed when they actually are. Some people go by a short version of their full name or by their middle name. Also, some women may have recently gotten married and forgotten to update the information with the regulatory commission.
Knowing how to find information on your advisor can assist you in determining if that advisor is right for you. Using the three tips above, you can easily take the confusion out of locating which regulatory body has authority over your advisor, what his or her financial history is, and how long he or she has been in business. Protecting your future and the security of your money is easier than you think when you know how to look for information on your advisor.