Financial fraud often starts with someone who sounds credible but is not registered, or who has a disciplinary record the client never checked. Verifying takes minutes and the tools are free.
1. Brokers and investment advisers
- FINRA BrokerCheck (brokercheck.finra.org) shows whether a person or firm is registered as a broker, their employment history, exams passed and any customer complaints, regulatory actions or arbitrations that must be disclosed.
- SEC Investment Adviser Public Disclosure (adviserinfo.sec.gov) covers registered investment advisers and their representatives, including each firm's Form ADV, which describes services, fees and conflicts of interest.
- Smaller advisory firms are registered with the state securities regulator; the North American Securities Administrators Association (NASAA) website lists every state regulator.
2. Understand how they are paid
| Model | What it means | Question to ask |
|---|---|---|
| Fee-only | Paid only by clients: flat, hourly or a percentage of assets | What is the total annual cost in dollars? |
| Commission | Paid by the companies whose products are sold | What commission do you earn on this product? |
| Fee-based | A mix of client fees and commissions | When do you earn commissions, and on what? |
Registered investment advisers owe clients a fiduciary duty. Broker-dealers must act in a retail customer's best interest when making recommendations under the SEC's Regulation Best Interest. Both must give retail investors a short Form CRS (client relationship summary) explaining services, fees and conflicts; ask for it and read it.
3. Planners and credentials
Many titles, such as "financial planner" or "wealth manager", are not protected on their own. For the CERTIFIED FINANCIAL PLANNER™ designation, use the CFP Board's verification tool to confirm certification and see any public disciplinary history. For other designations, check that the issuing organization offers a public lookup.
4. Insurance agents and companies
Insurance agents and companies are licensed by state insurance departments. Your state department can confirm an agent's license, and the National Association of Insurance Commissioners (NAIC) offers consumer tools including company complaint information.
5. Banks and credit unions
- Use the FDIC's BankFind tool to confirm a bank is FDIC-insured. Standard coverage is $250,000 per depositor, per insured bank, per ownership category.
- Federally insured credit unions are covered by the NCUA's share insurance, with the same standard $250,000 limit; the NCUA website has a credit union locator.
- The Consumer Financial Protection Bureau publishes a searchable consumer complaint database for many financial companies.
Red flags
- Guaranteed high returns with little or no risk.
- Pressure to act immediately or keep the opportunity secret.
- Requests to pay by wire, gift cards or cryptocurrency to an individual.
- No registration you can find in the tools above.
Frequently asked questions
How do I check a financial adviser's record?
Search FINRA BrokerCheck and the SEC's Investment Adviser Public Disclosure site. They show registration status, employment history and disclosures such as complaints or regulatory actions.
What is Form CRS?
A short client relationship summary that brokers and registered investment advisers must give retail investors, describing services, fees, conflicts of interest and disciplinary history.
How much does FDIC insurance cover?
The standard amount is $250,000 per depositor, per insured bank, for each account ownership category.
Sources are official government, regulator and professional-body resources named in the text. We do not accept payment from any organization mentioned. See our editorial standards.