In an age where online reviews influence everything from what we eat to where we vacation, it’s only natural for investors to want similar transparency when choosing a financial advisor or broker. That’s where FINRA’s BrokerCheck tool comes in—a powerful, free resource that lets you vet investment professionals and firms before you trust them with your money. Whether you’re a new investor just getting started or a seasoned one looking for peace of mind, knowing how to use the tool effectively can help you make more informed financial decisions. This guide walks you through what BrokerCheck is, how to use it, what to look for in a report, and what red flags to avoid.
What Is FINRA BrokerCheck?
It’s a free online tool provided by the Financial Industry Regulatory Authority (FINRA). It allows investors to research the background and experience of brokerage firms, individual brokers, registered investment advisers (RIAs), and financial advisory firms. FINRA provides key details like professional credentials, employment history, licensing status, regulatory actions, customer disputes, and more. Think of it as a financial background check—but one that’s publicly accessible and easy to use. FINRA created Broker Check to promote transparency in the financial industry and protect investors from unethical or unqualified professionals. If you’re considering working with a broker or firm, checking their record on Broker Check is a simple, essential step.
Why Should Investors Use BrokerCheck?
Even if someone comes highly recommended or appears polished and professional, their regulatory history may tell a different story. BrokerCheck helps investors verify a broker’s legitimacy, understand a professional’s qualifications, check for disciplinary actions or customer complaints, spot past employment gaps or short tenures, and avoid fraud and unethical practices. It only takes a few minutes, and the insights can be invaluable.
How to Access FINRA BrokerCheck
Accessing Broker Check is straightforward. Go to the official BrokerCheck website: www.brokercheck.finra.org. Use the search bar on the homepage and enter the name of the individual broker or firm you want to investigate. Review the results. If multiple people have similar names, use filters to narrow the search by location or firm name. You can also access BrokerCheck from FINRA’s main site, or from links on many investment firm websites where they provide transparency for their professionals.
What Information Does BrokerCheck Provide?
Once you search for a broker or firm, the report you receive is divided into several useful sections. Summary information includes the broker’s name, registration status, number of years in the industry, and total disclosures. Licensing and registrations show what licenses the broker holds, such as Series 7 or Series 63, and which states they’re registered in.
Employment history provides past and current employers, including dates of employment and job titles. Exams passed shows the exams the individual has passed to become a registered financial professional. Disclosure events are crucial and may include customer disputes, regulatory actions, civil judgments or criminal charges, terminations from previous firms, and bankruptcy or other financial issues. Each disclosure is accompanied by details such as dates, allegations, resolutions, and sometimes written statements from the broker.
Red Flags to Watch For
Not every disclosure means you should avoid a broker, but multiple or serious events are worth paying close attention to. Here are some red flags to look out for: multiple customer complaints or arbitrations, regulatory sanctions from FINRA, the SEC, or state regulators, disciplinary actions that involve fraud, misrepresentation, or breach of fiduciary duty, recent or repeated terminations, and criminal proceedings related to financial misconduct. If you’re not sure what something means, FINRA includes definitions and explanations in the report—or you can ask a qualified financial advisor or attorney for help interpreting it.
How to Interpret BrokerCheck Reports
The reports are factual and non-opinionated, so context matters. For example, a single customer dispute over investment losses might not be alarming—especially if it was resolved without penalty. But a pattern of disputes or regulatory infractions should raise concern. Consider asking these questions: Does this broker or firm have a long, clean track record? Are there recent complaints or unresolved disclosures? Do they appear to move from firm to firm frequently? Is their licensing current and valid? Evaluating these elements can help you gauge whether the person is trustworthy and experienced enough to manage your investments.
What BrokerCheck Doesn’t Show
While BrokerCheck is a robust tool, it doesn’t reveal everything. Some limitations include complaints under investigation might not yet be disclosed, unregistered individuals may not appear at all, unfounded allegations may still be listed even if dismissed, and older complaints may be removed from the report after a certain number of years. For deeper research, you may also want to consult the SEC’s Investment Adviser Public Disclosure (IAPD) system at www.adviserinfo.sec.gov or check with state securities regulators, who maintain their own complaint databases.
Using BrokerCheck to Vet a Firm
If you’re researching a brokerage firm, the FINRA tool provides similar details: number of registered representatives, states in which the firm operates, history of regulatory or legal actions, and prior mergers, acquisitions, or name changes. This is especially useful if you’re considering working with a new or independent firm and want to make sure they’re fully licensed and operating within the law.
Tips for Investors Using BrokerCheck
To get the most out of FINRA’s tool, keep the following in mind. Search both individuals and their firms to get a complete picture. Read disclosures carefully and look for patterns. Don’t rely solely on the tool—meet with the advisor, ask questions, and get second opinions. Ask the broker directly about anything you find. How they respond can say a lot about their integrity. If a broker is unwilling to discuss their record openly, that could be a sign to look elsewhere.
Choosing the right financial professional is one of the most important steps you can take to protect and grow your wealth. Broker Check makes it easier than ever to vet brokers, advisors, and firms before putting your trust—and your money—in their hands. A quick five-minute search can reveal valuable insights and help you avoid costly mistakes down the road. Transparency is your right as an investor, and BrokerCheck puts that power at your fingertips.
Need help evaluating an advisor or interpreting a BrokerCheck report? Contact Bakhtiari & Harrison today for personalized support. Our team can help you make informed, confident decisions with your investments.