SEC Q&A: How do I find out whether an investment adviser ever had problems with a government regulator or has a disciplinary history?

Golden Glasses

The Securities and Exchange Commission (SEC) has on their website a page entitled, “Investment Advisers: What You Need to Know Before Choosing One” which begins:

The Securities and Exchange Commission (SEC) receives many questions about investment advisers—what they are and how to go about choosing one. This document answers some of the typical questions we receive from investors about investment advisers.

Here is one of the questions and answer from that site:

Q: How do I find out whether an investment adviser ever had problems with a government regulator or has a disciplinary history?

A: Most investment advisers must fill out a form called “Form ADV.” They must file their Form ADVs with either the SEC or the state securities agency in the state where they have their principal place of business, depending on the amount of assets they manage.

Form ADV consists of two parts. Part 1 contains information about the adviser’s business and whether they’ve had problems with regulators or clients. Part 2 outlines the adviser’s services, fees, and strategies. Before you hire someone to be your investment adviser, always ask for, and carefully read, both parts of Form ADV.

You can get copies of Form ADV by accessing the Investment Adviser Public Disclosure (IAPD) website at http://www.adviserinfo.sec.gov/.

You can also get copies of Form ADV from the investment adviser, your state securities regulator or the SEC, depending on the size of the adviser. You can find out how to get in touch with your state securities regulator through the North American Securities Administrators Association, Inc.’s (NASAA) website or by calling (202) 737-0900. Ask your state securities regulator whether they’ve had any complaints about the adviser, and ask them to check the CRD (Central Registration Depository).

If the SEC registers the investment adviser, you can get a copy of the Form ADV by accessing How to Request Public Documents. In addition, at the SEC’s headquarters, you can visit our Public Reference Room from 10:00 a.m. to 3:00 p.m. to obtain copies of SEC records and documents.

Great information.

I would only add: here are our step-by-step instructions on how to look up information on any prospective financial advisor.

About the author

Matthew J. Illian, CFP®, AIF®
Matthew J. Illian, CFP®, AIF®

Matthew Illian is part of the Investment Committee at Marotta Wealth Management, Inc. and specializes in small businesses consulting and retirement planning. He is devoted to his lovely wife and three rambunctious boys all under the age of six. Favorite mountain biking trails: Forest Hill Park

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