How to Check an Investment Professional Before Hiring

Before hiring someone to help with investments, verify the person and the firm through official records. Investor.gov's Ask and Check page identifies tools for researching registration, business practices and disciplinary information. Start there rather than relying only on a referral or a sales presentation.

Which database should you use?

Investment Adviser Public Disclosure, or IAPD, provides information about SEC- and state-registered investment advisers and their representatives. FINRA's BrokerCheck covers current and former FINRA-registered brokers and brokerage firms.

The systems can redirect you to one another when appropriate. Search the individual and the firm, then check that the record matches the person you are considering. Similar names are a reason to verify details, not a reason to assume the first search result is correct.

What should you read beyond registration?

For an adviser, review Form ADV. Investor.gov explains that Part 2, the brochure, describes business practices, fees, conflicts and disciplinary information. Part 3, the relationship summary, describes services, costs, conflicts and questions to ask.

BrokerCheck can show employment history, industry exams, customer disputes and regulatory or disciplinary events. Read what an entry actually says and ask for an explanation. A clean-looking website does not replace those records, and a database entry should be read in its full context.

What questions belong in the conversation?

Ask what services you will receive, who makes investment decisions, how the professional is paid and what the total costs are. Compare the answers with the written disclosures. If something is inconsistent or unclear, settle it before signing or transferring money.

Professional designations deserve their own research. Investor.gov directs investors to a designations database to understand the titles people use. Checking credentials and disclosures is due diligence, not a guarantee of good results. Investments can lose value even when a professional is involved.

Frequently asked questions

Should I check the firm as well as the individual? Yes. The official tools provide different information about each.

Where can I learn about an adviser's fees and conflicts? Start with Form ADV's brochure and relationship summary, then ask about anything you do not understand.

Sources and further reading: Investor.gov, Ask and Check (https://www.investor.gov/introduction-investing/getting-started/researching-investments/ask-and-check).