Released: October 17, 2018

Help Desk FAQ

How can I make sure a financial adviser is legitimate?

It’s important to do your due diligence to avoid losing your money to an unqualified adviser, scam artist or bogus investment.

Federal and state securities laws require brokers, investment advisers and their firms to be licensed or registered and to make important information available to the public for free, including an adviser’s education and previous employment, and whether any disciplinary action has been taken against a firm or adviser by the government for unethical or improper conduct.

Depending on the value of the assets being managed, investment advisers and firms have to register with either the U.S. Securities and Exchange Commission (SEC) or the state securities agency where they operate. Details on investment firms and individual advisers’ qualifications are available on the SEC Investment Adviser Public Disclosure website (IAPD)  and at Investor.gov. To find your state’s securities regulator, contact the North American Securities Administrators Association (NASAA).

The Financial Industry Regulatory Authority (FINRA) is a non-governmental organization that regulates member brokerage firms, provides investor education and protection, and disciplines brokers who break the rules. Information about brokerage firms and individual brokers is available through FINRA’s BrokerCheck. Here you can find out if a broker is properly licensed, has had disciplinary problems or has received serious complaints from investors.

If you are considering an annuity or other insurance-based investment products, make sure the insurance agent and insurer are licensed in your state by contacting your state insurance department.

Smartcheck.gov’s “True Fraud Stories” video series by the U.S. Commodity Futures Trading Commission (CFTC) is designed to prevent some investmentpitfalls.

You can also report problems with a financial adviser to FINRA, the SEC and your state securities agency.