Is Your Financial Advisor Legit?

Below are a few steps that can be a starting point in verifying the legitimacy and credentials of a financial advisor:

• Check their credentials 

  • Look for certifications like CFP (Certified Financial Planner) or CFA (Chartered Financial Analyst) which indicate that the advisor has met certain educational and experience requirements
  • It doesn't make them a good advisor to have these credentials, but it's a good start
    
    

• Look them up on the SEC's Investment Adviser Public Disclosure (IAPD) website

  • This IAPD site allows you to view an advisor's Form ADV, which provides information on their qualifications, business practices and any disciplinary history
    
    

• Check with the Financial Industry Regulatory Authority (FINRA) 

  • This organization maintains a database of registered investment advisors and can provide information on an advisor's employment and disciplinary history.
    
    

• Get referrals 

  • Ask friends & family, work colleagues or other professionals (i.e., your accountant, lawyer, etc.) in your network for recommendations
  • Ask them questions about why someone may or may not be a good advisor
  • This simple step can be very valuable from a diligence perspective, as it's based on a real customer and client experience
    
    

• Check for any complaints or legal actions

  • Look for any complaints or legal actions against an advisor or his / her firm on the SEC's website (Check Your Investment Professional) or FINRA's BrokerCheck website
    
    

• Verify an insurance agent's license 

  • These types of advisors sell insurance products, such as life insurance and annuities
  • You can ask for their insurance agent license, which is given by the state
  • Insurance is regulated at the state level in the U.S.
    
    

It is important to remember that even legitimate financial advisors may not be the right fit for a specific financial need - different advisors often have deeper domain expertise in certain areas than others (i.e., tax planning vs. estate planning, certain types of investments & investment strategies and so on). It is important to conduct research and ask questions before working with a financial advisor.

This is a high-level summary. Please refer to FINRA:“Choosing an Investment Professional” for a more comprehensive explanation.