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.
- 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.