With the complexities of today’s financial markets, many investors seek professional advice from investment advisors. However, choosing the right advisor is critical, as the wrong one can destroy your financial future through mismanagement, excess fees or even outright fraud. This article provides the best resources for researching and reviewing investment advisors to find top-rated ones while avoiding those with concerning complaints or disciplinary records.
Leverage in-depth advisor databases like BrightScope and AdvisorInfo
Two invaluable resources for investment advisor reviews are BrightScope and AdvisorInfo. BrightScope allows you to search for advisor profiles containing their education, experience, specialties, assets managed, compensation model and regulatory issues. AdvisorInfo similarly provides background checks plus in-depth details on an advisor’s qualifications, ethics, regulatory actions, customer disputes and more. Checking an advisor on these sites can uncover red flags like a questionable disciplinary history or opaque fee structure.
Search the SEC and FINRA sites for enforcement actions
The SEC and FINRA have searchable online databases for any regulatory actions taken against investment advisors and brokers. You can input an advisor’s name or CRD number to see if any enforcement complaints, sanctions or license revocations exist. Just one serious disciplinary incident should make you think twice. Standard background searches may miss regulatory issues, so reviewing the SEC and FINRA directly provides an extra layer of protection.
Consult third-party rating platforms like Paladin and BrightScope
Sites like Paladin Registry and BrightScope Rate Advisors allow you to view advisor ratings from clients and industry experts. Sort and filter advisors by location, assets managed, specialty, rating and more to narrow your choices. Pay attention to advisors with consistently high marks for ethics, transparency and fiduciary duty. Those with poor communication or high fees consistently mentioned in reviews are ones to avoid.
Read in-depth advisor reviews on sites like InvestorWatchdog
While rating sites provide useful advisor ratings and summaries, you’ll want to dig into the details within actual reviews. InvestorWatchdog features reviews from real clients describing their first-hand experiences with advisors. Look for common themes around an advisor’s communication style, expertise and fee structure. Multiple serious complaints should be a red flag. Quality advisors mention great customer service and transparency.
Using these best-in-class resources for investment advisor reviews allows you to thoroughly evaluate advisors, searching for top performers while weeding out those with complaints or disciplinary histories. Taking time to research before choosing an advisor is key to finding one you can trust to manage your hard-earned capital.