SGH Wealth Management: What I'm Reading

BrokerCheck: The first line of defense in protecting your money

SGH Wealth Management’s “Read What I’m Reading” Aug. 2021 | Aug. 6th, 2021

Trust is the most important aspect in receiving advice from a financial advisor. Trust also can lead to blind spots as the fraudulent financial advisors of America also happen to be charming individuals who can come off quite convincingly. One lesser-known tool that all Americans should be more aware of is FINRA’s BrokerCheck®. BrokerCheck is a free tool, without bias, that can expose some red flags that you need to know before making the important decision on who can be trusted.


And don’t assume just because a firm is large and has a national presence, that they might avoid such unscrupulous advisors carrying a track record of past client complaints. Type a famous brokerage firm that you know into the second “Firm” box in the BrokerCheck website and you’ll get hundreds of listings of broker transgressions, fines, and examples where customers received arbitration awards after various kinds of financial abuse. The false sense of safety that a larger firm might offer doesn’t change the actual individual financial advisor that you are working with.



In addition to giving you a snapshot of the Financial Advisor’s employment history, regulatory actions, and arbitrations & complaints; it is also an excellent way to find out if your advisor is able to collect commissions from the investments that they put you in. Since these types of commissions are hidden fees from their clients, its better to get this answered straight from the regulators, FINRA. If you see the letter “B” you are working with a Licensed Commission Broker. Not to be confused with “PR” or “IA” which signifies non-commission advisors. Knowing your advisor’s conflicts of interest is an important aspect to trusting the advice that you receive.


Whether deciding on a Wall Street firm, or an independent advisor, the search for reliable investment advice can be challenging. Unfortunately, less than 1 in 10 investors are familiar with BrokerCheck, making them more susceptible to hiring a financial advisor with a questionable past. Encourage those around you to run a search on THEIR financial advisor today and reach out if we might be able to help you interpret what you find.

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