FINRA BrokerCheck

This page provides a “how-to” guide to using FINRA BrokerCheck (sometimes improperly referred to as “FINRA brokers check”) database. It also explains what information a user can find through this helpful directory.

What is FINRA BrokerCheck?

FINRA BrokerCheck is a free, online database that enables users to find information about individual financial advisors or brokerage firms. FINRA (the Financial Industry Regulatory Authority), which is responsible for much of the oversight of the securities industry, controls the directory.

What Information does FINRA BrokerCheck Provide?

FINRA BrokerCheck enables viewers to search for information for either individual financial advisors or securities dealers. The database provides helpful information that regulators, firms, and the public can access to glean information about firms, registered individuals, and their backgrounds. FINRA BrokerCheck provides information that includes education, work experience, and disciplinary history, among other things, which is explained in greater detail below.

Where does the Information on FINRA BrokerCheck come from?

The information from FINRA BrokerCheck comes from the Central Registration Depository (“CRD”).

FINRA maintains the CRD, which contains registration and licensing information about financial advisors, dealers, and other securities industry professionals. It serves as a comprehensive record-keeping system for the securities industry.

Applicable rules require firms and licensed individuals to submit specific information to the CRD through regulatory filings. Two, prominent examples of these regulatory filings include the Form U4 and Form U5.

What is the Form U4?

The Form U4 is used to register individuals with the securities industry. All states and self-regulatory organizations (SROs) use the Form U4 to register and license individuals who work for broker-dealers, investment advisers, or other securities firms.

The Form U4 collects information about an individual’s personal and professional background, including employment history, education, disciplinary history, and criminal history. The form also requires the individual to disclose any financial judgments or liens, customer complaints, bankruptcies, or other legal actions that may have an impact on their ability to work in the securities industry.

Individuals and firms must regularly amend the Form U4 if any information included in it changes.

What is the Form U5?

FINRA uses the Form U5 to notify regulators and the public when a registered securities professional has left a firm. It is also known as the Uniform Termination Notice for Securities Industry Registration.

The Form U5 provides information about the circumstances surrounding a financial advisor’s termination of employment. This includes whether the broker-dealer terminated the financial advisor for cause or not. The form also includes information about any regulatory or disciplinary actions taken against the individual. It also contains customer complaint information or arbitration claims filed against them.

Financial firms must submit the information from the Form U5, which in turn appears on the CRD.

Importantly, not all information from the CRD is disclosed on FINRA BrokerCheck. Some of what it does provide is explained below.

How to Search for Information About a Specific Broker.

Viewers can find information about a specific advisor by following these steps:

Step 1- Type the name or CRD number of the individual into FINRA BrokerCheck.

Once users arrive at the search page, it provides a tab to designate a search for an “Individual” or “Firm.” Make sure the tab for “Individual” is selected.

From there, the viewer may type in the name of the individual; the firm that employees her; and/or the city, state, or ZIP code where the individual works.

Alternatively, the user may input the CRD number of the individual broker they would like to search (if they know it). FINRA assigns a unique CRD number to every  individual with a securities license. Therefore, a CRD number search provides the most fool proof way for the viewer to find an individual broker.

Step 2- Once the information is inputted, click “SEARCH.”

After the user clicks “SEARCH,” the FINRA BrokerCheck directory will display the licensed individuals who match the inputted criteria. If the user knowns the broker’s CRD number, only one individual should appear.

The more information the user inputs into the directory, the fewer potential matches will appear. Occasionally, if a broker has a common name, the user might find numerous potential matches. Therefore, viewers should take care to include as much information as they know about the broker they are searching to limit potential matches.

Step 3- Click on the name of the correct individual.

Once the user locates the individual they are searching for, the viewer can click on the individual’s name. FINRA BrokerCheck will then take the user to a summary screen dedicated to the specific financial advisor.

How to Understand the Information FINRA BrokerCheck Provides about an Individual.

The FINRA BrokerCheck webpage dedicated to individual brokers can be broken down into 4 categories of information. The website prominently displays these categories in 4 boxes that run across the top of the page that contain hyperlinks to more information about that specific category. These categories are described below:

Category 1- Disclosures

The first box that appears in yellow at the top of individual FINRA BrokerCheck webpage states, “Disclosures.” Disclosures refer to the customer complaints, FINRA arbitrations, regulatory actions, FINRA disciplinary actions, employment terminations, bankruptcies, and certain criminal and civil issues in which the financial advisor was involved.

In sum, disclosures relate to the individual advisor’s history that a user might consider a red flag. If the user clicks the “Disclosure” hyperlink at the top of the page, the user will be brought to the individual disclosures, which contain a brief summary of what occurred in each.

For example, customer complaints and arbitrations refer to instances where an investor(s) complained about something the broker did relating to the investor’s accounts. Note that arbitrations in this context refer to customer complaints that escalated to a formal lawsuit. This includes arbitrations that settled, and FINRA arbitrations that a customer won.

These customer complaints often revolve around, or mention alleged misconduct attributable one the following issues:

• Improper Asset Allocation;
• Breach of Fiduciary Duty;
• Churning and Excessive Trading;
• Failure to Supervise;
• Securities Fraud;
• Selling Away;
• Investment Suitability
• Unauthorized Trading;
• Financial Abuse

In reviewing disclosure information, user’s should be mindful that FINRA maintains a broad definition of a customer complaint that must be made public. Additionally, customer complaint information excludes those complaints that a broker has had expunged through FINRA’s expungement process.

Category 2- Experience and Broker’s Employment History

The second category prominently displayed at the top of the FINRA BrokerCheck page allows users to review the broker’s employment history, and experience in the securities industry. The page will tell you how many years the broker has worked in the industry and the specific firms she worked for.

The website provides a timeline on the webpage that clearly identifies the firm, the years worked at that firm, and when any Disclosures occurred. The timeline also contains hyperlinks to each Disclosure so the user can quickly access that information.

If the viewer scrolls towards the bottom of the FINRA BrokerCheck page, they can see information about the firm where the broker currently maintains his registration. The directory provides a hyperlink that enables the viewer to quickly navigate to the page dedicated to that firm. Below that, the page provides hyperlinks to all firms where the broker previously registered.

Category 3- Exams Passed

“Exams Passed,” appears as the third category. Financial advisors must pass securities exams that qualify them to sell different categories of securities and financial products. The exams can also qualify individuals for licensure to supervise other financial advisors. Users can use this information to see what securities licenses the broker holds. And when the he or she earned each.

Category 4- State Licenses

Financial advisors must register in the individual states where they intend to sell securities products. This category allows the user to see what states the financial advisor may sell securities.

How to Download a “Detailed Report” about a Financial Advisor.

If the viewer would like more information than what the webpage provides, they can download a “Detailed Report.” The “Detailed Report” provides a PDF with more nuanced information than what the broker’s dedicated webpage provides.

To access this document, the viewer simply clicks the hyperlink towards the top right of the page that says “Detailed Report” and the PDF will automatically appear either in downloaded form, or through a new browser tab.

How to Search for Information about a Specific Brokerage Firm.

The database also enables viewers to access information about financial firms. The process to access firm-specific information mirrors the process to access information about a financial advisor, with two minor caveats.

First, rather than select the tab at the top of the page dedicated to an “Individual,”  users simply click the tab right next to it that says, “Firm.”

Second, the page will prompt viewers to input information that includes: the firm name or CRD number; and the city, state, or ZIP code for the firm. The page (obviously) excludes a prompt for an individual’s name.

How to Understand the Information FINRA BrokerCheck Provides about a Broker-Dealer.

The pages dedicated to broker-dealers are very similar to the pages dedicated to financial advisors with a few, notable exceptions.

First, the categories of information for firms are slightly different. The categories include:

• Disclosures- Disclosure information is basically identical to the disclosure information provided for individual financial advisors, but are more geared towards regulatory issues and history of FINRA disciplinary actions.
• Registration Status- This category tells the viewer if the brokerage firm is properly registered with the applicable regulators.
• Company type- This informs the viewer the business entity of the company. For example, LLC, LLP, corporation, etc.
• Licenses- Similar to broker-specific pages, this category informs the viewer of what states the firm maintains registrations.

Viewers may also download a “Detailed Report” to obtain more nuanced information about the firm the same way described above relating to individuals. They can click hyperlinks to review information about investment adviser firms, which FINRA does not directly regulate.

FINRA BrokerCheck is a powerful tool that members of the public can use to obtain important information about those tasked with handling personal finances.

*The Law Offices of Patrick R. Mahoney is a full service law firm with extensive experience litigating cases involving the financial services industry. This page is for information purposes only and does not constitute legal or investment advice; nor is it a comprehensive explanation of all components of the FINRA BrokerCheck database. If you believe you have a securities-related claim or issue, you should speak to competent counsel to better understand your options. Or, contact us.*