The Department of Labor feels it is important that retirement plan sponsors review their providers at least every three to five years. One way to check on the status of the financial adviser working with your retirement plan is by using BrokerCheck -- a free service provided by the Financial Industry Regulatory Authority. FINRA is the regulator for all securities firms doing business in the U.S. Their primary objective is to protect investors.

BrokerCheck lists any financial adviser violations of investment related regulations or statues and will also tell you whether your financial adviser is licensed to do business in your state. Don't worry, your financial advisor will not be informed about whether you used the service to check his/her background.

BrokerCheck will tell you:

  • Whether there have been any customer complaints filed against your adviser;
  • The status or resolution of these complaints;
  • Whether your adviser has been disciplined for any reason;
  • If your adviser violated any rules or regulations;
  • Whether your adviser has been terminated for any violations; and
  • If your adviser is currently under investigation by the Securities Exchange Commission or FINRA.

Any complaint or violation that you find listed should be considered serious. Studies have found that advisers who offend tend to re-offend. The service is easy to use. Begin by:

  1. Going to the BrokerCheck website;
  2. Enter your adviser's full name (it is helpful to know the adviser’s middle name or initial since there are over 650,000 advisers nationwide) and click on "Search" once the correct name appears;
  3. After your adviser's name appears on a new page, click on "Details";
  4. Should a "Disclosure Event" appear, click on "Detailed Report" to receive more information.

Whether you are looking for an adviser to help with your personal investments or searching for an adviser to work with your retirement plan, the very best time to use BrokerCheck is before you hire someone. However, periodic checks of your adviser's status are also important.

 

Robert C. Lawton is president of Lawton Retirement Plan Consultants, LLC (lawtonrpc.com), an RIA firm helping retirement plan sponsors with their investment, fiduciary, employee education and compliance responsibilities. He may be contacted at bob@lawtonrpc.com or 414.828.4015.

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