BrokerCheck: What It Is and How to Use It
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What is BrokerCheck?
BrokerCheck is a free service that allows you to investigate the records of brokers and brokerage firms. It also provides some basic information on investment advisor representatives and firms.
The tool is provided by the Financial Industry Regulatory Authority, or FINRA — a self-regulatory non-governmental organization that oversees U.S. broker-dealers — to help investors assess the standings and work history of the individuals and firms they are, or are considering, getting into business with. With BrokerCheck, you can find information about a broker, including their credentials, qualifications, employment history and disciplinary events.
Where does BrokerCheck get its information?
BrokerCheck information comes primarily from two databases, depending on what type of information you’re looking for:
The Central Registration Depository program is administered by FINRA. The database includes details listed on registration and licensing forms filled out by regulators, brokers and brokerage firms.
The Investment Adviser Public Disclosure database, or IAPD, is from the Securities and Exchange Commission, and it includes information about investment advisor firms and representatives, such as employment history and disciplinary events. Advisors submit their filings through the SEC's online Investment Adviser Registration Depository system.
How do I use BrokerCheck?
BrokerCheck allows you to quickly research brokers, advisors and firms.
To look up an individual, all you need is their name. You can also include the name of their firm and where they’re located to narrow down your results. Similarly, to look up a firm, you’ll need its name; if you want, you can also include its location. Once you find the individual or firm you’re looking for, you can generate a BrokerCheck report for free.
Here’s what you’ll find in those reports:
Reports for brokers
On BrokerCheck, you can find information about brokers who are currently registered with FINRA or a national securities exchange, as well as brokers whose registrations have been terminated.
For a registered broker or one who has been registered in the last 10 years, the report will provide:
A report summary about the broker and their credentials.
Broker qualifications, including their current registrations and licenses, as well as industry exams they have successfully completed.
Registration and employment history, detailing registered securities firms where they are or have been registered, as well as where they’ve worked. Work history includes self-employment, military service and unemployment, as well as full-time and part-time work — even if it wasn’t in the industry — in the past decade.
Disclosures including disputes with customers and disciplinary events. It can also include pending actions and unproven allegations.
For brokers who haven’t been registered in over a decade, reports generally include the same things. The main difference on these reports is that events included in the disclosures section must be ones the broker was found at fault for.
Reports for brokerage firms
Reports for brokerage firms will include:
A report summary describing the firm.
A firm profile that lists those who have a controlling interest or have direct influence on day-to-day operations.
Firm history related to mergers, acquisitions or name changes that affect the firm.
Firm operations, such as the firm’s licenses and registrations, what types of business it is engaged in or expects to be engaged in, and whether it is currently suspended with any regulators.
Disclosures including arbitration awards and disciplinary events. This can include pending actions and unproven allegations.
Reports for investment advisors
On its site, BrokerCheck offers very limited information about investment advisor representatives and firms. Unless they are also brokers or brokerage firms, investment advisors will have only basic information like name and address listed. For more information, BrokerCheck will direct you to the advisor's page on the SEC’s IAPD.
What is a BrokerCheck report dispute?
On some BrokerCheck reports, you may see a notation indicating a matter is under dispute. FINRA allows brokers and firms to dispute information they deem incorrect on their own reports.
In order to submit a dispute, individuals and firms must complete and sign a dispute form and provide supporting documentation. Then, FINRA will determine whether the dispute is eligible for investigation.
According to FINRA, disputes are eligible only if they are related to factual information, rather than matters that are open to interpretation. If the information is found to be inaccurate, FINRA will update, modify or delete the disputed information. Once the matter is resolved, the dispute notification will be removed from the report.
The expungement process has attracted controversy, with some criticizing it for shielding brokers from legitimate allegations. Those who support the process praise it for its ability to protect brokers from unfounded allegations.
What other tools can I use to look into brokers and brokerages?
FINRA offers two databases that the public can use in addition to BrokerCheck: one that tracks arbitration awards and another that monitors disciplinary actions. It also has a list of brokers who have been barred by FINRA.
You can also check with state securities regulators to get additional information about brokers and investment advisors.
Although BrokerCheck reports do include a disclosure section, there’s information that section doesn’t include, such as details that brokers haven’t reported or aren’t obliged to report. These can include:
Civil litigation unrelated to investments.
Customer complaints that don’t involve sales practice violations, fraud or theft.
Non-investment-related misdemeanor charges or convictions.
Arrests that didn’t lead to a charge or conviction.
It can be helpful to do a quick internet search to make sure you have all the necessary details before choosing to work with a broker or brokerage firm.
