Do You Really Know Your Advisor?

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Luellen Lockwood, MBA, CPA, EA | April 25, 2017


In this age of non-stop information available on the internet, we have become experienced researchers on everything from buying a new car to our next espresso machine.  But, do we take the time to check out every detail on the firm who is going to invest and manage our life savings?  Hmmm, that made you pause a moment, didn’t it?  Then, you asked, “How do I even do that?”

Earlier this month, Taylor Drake, my colleague here at Avier Wealth Advisors, wrote about what it means to be a “fiduciary” in our industry and why that is important to you as an investor.  This term has become a new buzz word in light of the DOL Fiduciary Rule, whose implementation has been delayed until at least June 9th of this year.  As Taylor discussed in his blog, we at Avier are fiduciaries regardless of the future of this rule.  Just because we’ve told you this, how can you verify this?

Well, it’s really quite simple.  Go to www.sec.gov and click on “Education,” then click on the second option, “Check out a broker or advisor.”  Or click here to go directly to the search function page.  You can enter the firm’s name or individual’s name.

Here are the items you want to check:

  • For a firm:
    • Click on “view latest Form ADV filed.” This will give you important technical facts about the firm:  how they are registered with the SEC, ownership, assets under management, types of clients, services provided and other business activities.  In Item 11, the disciplinary history for the firm and its advisory affiliates are disclosed, so this is an important section to read thoroughly.
    • Click on “Part 2 Brochures.” This document is written in plain-speak English and provides information about a firm’s operations:  how your account will be managed, fee structure, Code of Ethics, just to mention a few sections.

All firms registered with the SEC are required to update both forms no less than once a year. If you are a client of a registered investment advisor, then you should receive a notice annually that you can request a copy of the updated Form ADV Part 2 Brochure.  However, here at Avier, we take this a step further and furnish our clients with a full copy of both parts of our updated Form ADV Part 2 on an annual basis.  You can always find the most current version of our ADV Part 2 on our website.

Whenever you sign a management agreement with a registered investment advisor, the firm is required to give a copy of its ADV Part 2 brochure to you.

  • For an advisor:
    • Once you find the correct advisor, you will see below the person’s name whether he/she is registered as an Investment Adviser Rep or Broker or both. To the right of the person’s name, click on “get details.”  This will give you an overview for that person.  Should the person be a broker, be sure to click on the link to check the broker database at finra.org/brokercheck.
    • Next, click on “detailed report.” This report gives you employment history, registrations, licenses, credentials, and most importantly, any disciplinary events.

Even though researching your advisory firm or advisor may not be as much fun as looking for your next car, it will let you sleep at night, knowing that you’ve done your due diligence on those to whom you are entrusting your financial future.   We appreciate the time that potential clients take in checking out our firm and welcome their questions.  This is part of our commitment to building client relationships on trust and transparency.

When your due diligence is done, you will be a more informed investor.   This brings to mind Paul Harvey, the radio broadcaster and Presidential Medal of Freedom recipient, and his signature sign-off:   “And, now you know the rest of the story.”

Posted by Carly Atkins on April 25, 2017