Financial regulatory authority making it even easier for investors to access broker and firm histories
As of June 6th, 2016, FINRA member firms are required to place a link on their website to their BrokerCheck reports. This gives potential clients and investors more information than ever before about the brokers and firms they’re thinking of investing with.
What is BrokerCheck?
BrokerCheck is an online financial industry search service provided by FINRA. This free service allows you to type in your current or prospective broker’s name and see their employment history, certifications, and licenses, as well as regulatory actions, violations or complaints.
BrokerCheck also allows you to see if the broker or brokerage firm is registered, what has been disclosed to financial regulators, the broker’s experience, and what a broker or brokerage firm is able to do, based on the exams they have passed and licenses they hold.
Access to this information makes it easier to screen out firms with unsavory records and high numbers of complaints. Of course, just because a firm or broker doesn’t have complaints on BrokerCheck doesn’t mean it isn’t doing something unethical or illegal, so you should still use your common sense and detective skills as a savvy consumer to determine whether a broker or firm is right for you.
What has changed?
FINRA amended Rule 2210 (Communications with the Public,) mandating that links to BrokerCheck reports be present on financial firm’s pages for retail investors, as well as “any other web page that includes a professional profile of one or more registered persons who conduct business with retail investors.”
This regulatory action is an important step in protecting investors from fraud. When investors have better access to reliable information, they’re better able to vet the brokers and firms they are or may work with, enabling them to make better decisions about where and how to invest their money.
Are firms complying with this new standard?
In general, it seems that many of the major national and regional firms, as well as online brokers, are complying with these new regulations. Specifically, Edward Jones, E*Trade, JPMorgan Chase, Merrill Lynch, Raymond James, Prudential, Wells Fargo, and Charles Schwab have all been found to show a link to BrokerCheck on their homepage. Locations of the link varied, and while most firms simply provided a link to the BrokerCheck homepage, some of the firms provided a link to their specific BrokerCheck report.
No matter who you’re thinking of investing with, it’s a good idea to check their BrokerCheck report first; avoiding fraudulent and/or unethical brokers, advisors, and firms can save you lots of time, heartache and expense.
If you have any questions about the FINRA or BrokerCheck, or think you have been defrauded by a broker, financial advisor, or financial institution, or want to know your rights as an investor, contact Silver Law Group for a consultation today.