Title Slide
Inves&ga&ng	
  	
  
Stock	
  Brokers,	
  
Investment	
  Advisers	
  
&	
  Financial	
  Planners	
  
Wells	
  
Rob	
  
Adjunct	
  Faculty,	
  University	
  of	
  Maryland,	
  Philip	
  
Merrill	
  College	
  of	
  Journalis...
What	
  You	
  Will	
  Learn:	
  
•  Find	
  penalBes,	
  employment	
  histories	
  of	
  
financial	
  professionals	
  u...
Research	
  Brokers,	
  Advisers
FINRA	
  BrokerCheck	
  	
  
-­‐-­‐Records	
  on	
  1.3	
  million	
  current	
  and	
  f...
FINRA	
  BrokerCheck
FINRA	
  (Financial	
  Industry	
  Regulatory	
  Authority):	
  	
  Industry	
  
group	
  that	
  lic...
First	
  Screen
Star&ng	
  Your	
  Search
Having	
  a	
  CRD	
  number	
  speeds	
  your	
  search.	
  
CRDs	
  available	
  on	
  complai...
Get	
  Full	
  Name,	
  Middle	
  Ini&al,	
  Etc.	
  
Get	
  Full	
  Name	
  of	
  Your	
  Broker.	
  Thousands	
  
of	
  ...
Robot	
  
Your	
  Turn	
  
hOp://www.finra.org/Investors/
ToolsCalculators/BrokerCheck/	
  
Search:	
  “Bernard	
  Madoff”	
  
hOp://www.finra.org/Investors/
ToolsCalculators/BrokerCheck/	
  
Photo	
  by	
  Flickr	
 ...
The	
  document	
  
	
  
For	
  Firms:	
  
• Overview	
  of	
  the	
  firm,	
  and	
  ownership	
  
• History,	
  including	
  any	
  mergers	
  or	...
Employment	
  History	
  
Summary	
  of	
  Regulatory	
  Ac&ons,	
  Status	
  
Details	
  of	
  Ac&on	
  
Get	
  to	
  source	
  material	
  
Details	
  of	
  Ac&on	
  
Get	
  source	
  material	
  
Backgrounding	
  
	
   Source:	
  The	
  Washington	
  Post	
  
Contact	
  Former	
  Co-­‐Workers:	
  Work	
  History	
  
•  Unsuitable	
  Investments	
  
	
  
•  Churning	
  
	
  
•  10b5	
  
	
  
•  Breach	
  of	
  Fiduciary	
  Duty	
  
	
  P...
Use	
  BrokerCheck	
  
to	
  Cover	
  PoliBcs	
  
Your	
  Turn	
  
Search:	
  
“Jon	
  
Corzine”	
  
hOp://www.finra.org/Investors/ToolsCalculators/
BrokerCheck/	
  
Photo	
  by	
  Flickr	
 ...
Terms	
  –	
  Jargon	
  Buster	
  
hOp://www.finra.org/web/groups/industry/@ip/@comp/@regis/documents/
appsupportdocs/p1169...
Ques&ons	
  about	
  BrokerCheck?	
  
	
  
• Nancy	
  Condon	
  –	
  202-­‐728-­‐8379	
  –	
  nancy.condon@finra.org	
  
	
...
Investment	
  Adviser	
  Public	
  Disclosure	
  
hnp://www.adviserinfo.sec.gov/IAPD/Content/IapdMain/iapd_SiteMap.aspx	
 ...
Who	
  Regulates	
  Advisers?	
  
Dodd-­‐Frank	
  Act:	
  Boosts	
  states'	
  role	
  in	
  regulaBng	
  advisers	
  
	
 ...
Form	
  ADV	
  
Main	
  Disclosure	
  Form	
  for	
  Investment	
  Advisers	
  
	
  
• Part	
  1:	
  Summary	
  of	
  advi...
Red	
  Flags	
  
•  ArbitraBon	
  cases.	
  What	
  
happened?	
  	
  
	
  
•  Employment	
  history.	
  RegistraBon	
  
g...
 
Ques&ons	
  about	
  Investment	
  
Adviser	
  Public	
  Disclosure?	
  
	
  
SEC	
  Office	
  of	
  Investor	
  EducaBon	...
 State	
  securi&es	
  regulators	
  
North	
  American	
  SecuriBes	
  Administrators	
  AssociaBon	
  
	
  
•  Always	
 ...
State	
  Enforcement	
  
hnp://www.nasaa.org/regulatory-­‐acBvity/enforcement-­‐legal-­‐acBvity/enforcement-­‐directory/	
...
A1	
  NYT	
  story	
  
on	
  LPL	
  
Financial	
  -­‐-­‐	
  
Uses	
  state	
  
regulators	
  as	
  
sources	
  
hnp://nyB....
Cer&fied	
  Financial	
  Planners	
  
•  CFP	
  ®	
  designaBon	
  
•  Must	
  pass	
  series	
  of	
  exams	
  
•  Subject...
CFP	
  Board	
  website	
  lists	
  revoked	
  planners	
  by	
  state	
  
hnp://www.cfp.net/about-­‐cfp-­‐board/ethics-­‐...
Search	
  for	
  a	
  Cer&fied	
  Financial	
  Planner	
  	
  
hnp://www.cfp.net/uBlity/verify-­‐an-­‐individual-­‐s-­‐cfp-...
Example	
  of	
  Disciplinary	
  Record	
  
CFPs	
  and	
  `Anonymous	
  Case	
  Histories’	
  
Can	
  Be	
  Linked	
  to	
  Public	
  Sanc&ons	
  
Check	
  Disciplined	
  CFPs	
  in	
  
NY,	
  NJ,	
  CT	
  
	
  
hnp://www.cfp.net/about-­‐cfp-­‐board/ethics-­‐
enforceme...
 
Ques&ons	
  about	
  Cer&fied	
  
Financial	
  Planners?	
  
	
  
Dan	
  Drummond	
  
	
  202-­‐550-­‐4372	
  	
  
ddrumm...
Rob	
  Wells	
  
	
  
University	
  of	
  Maryland,	
  	
  
Philip	
  Merrill	
  College	
  of	
  Journalism	
  
	
  
robw...
Investigating Stock Brokers, Investment Advisers and Financial Planners by Rob Wells
Investigating Stock Brokers, Investment Advisers and Financial Planners by Rob Wells
Investigating Stock Brokers, Investment Advisers and Financial Planners by Rob Wells
Investigating Stock Brokers, Investment Advisers and Financial Planners by Rob Wells
Investigating Stock Brokers, Investment Advisers and Financial Planners by Rob Wells
Investigating Stock Brokers, Investment Advisers and Financial Planners by Rob Wells
Investigating Stock Brokers, Investment Advisers and Financial Planners by Rob Wells
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Investigating Stock Brokers, Investment Advisers and Financial Planners by Rob Wells

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Rob Wells presents "Investigating Stock Brokers, Investment Advisers and Financial Planners" during the Fall 2013 Society of American Business Editors and Writers Conference in New York, Oct. 4, 2013.

Wells is a lecturer at the Philip Merrill College of Journalism at the University of Maryland and a former Reynolds Visiting Professor in Business Journalism at the University of South Carolina.

For more information on training for business journalists, please visit http://businessjournalism.org.

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Investigating Stock Brokers, Investment Advisers and Financial Planners by Rob Wells

  1. 1. Title Slide Inves&ga&ng     Stock  Brokers,   Investment  Advisers   &  Financial  Planners  
  2. 2. Wells   Rob   Adjunct  Faculty,  University  of  Maryland,  Philip   Merrill  College  of  Journalism.     Ph.D.  student     Reynolds  VisiBng  Professor  of  Business   Journalism,  University  of  South  Carolina,   Columbia.       Former  Deputy  Bureau  Chief,  Dow  Jones/Wall   Street  Journal,  Washington,  D.C.     Reporter  for  Dow  Jones,  Bloomberg,   The  Associated  Press  
  3. 3. What  You  Will  Learn:   •  Find  penalBes,  employment  histories  of   financial  professionals  using  free   databases.     •  Review  how  the  SEC,  states  and  industry   groups  do  and  don’t  police  Wall  Street;   access  to  their  invesBgaBons.     •  Find  “red  flags,”  such  as  “10b5”  fraud   and  unsuitable    investment    cases.  
  4. 4. Research  Brokers,  Advisers FINRA  BrokerCheck     -­‐-­‐Records  on  1.3  million  current  and  former  professionals,  17,400  firms.       SEC’s  Investment  Adviser  Public  Disclosure  (IAPD)   -­‐-­‐441,000  professionals,  45,700  firms     Cer&fied  Financial  Planner  Board  of  Standards  Inc.  (CFP)   -­‐-­‐69,000  professionals     Free  Portals  to  research  your  stories.   Use  any  computer  with  Internet  access.   No  special  soware  or  database  knowledge  needed.  
  5. 5. FINRA  BrokerCheck FINRA  (Financial  Industry  Regulatory  Authority):    Industry   group  that  licenses  and  polices  stock  brokers.     Data  derived  from  CRD:  Central  RegistraBon  Depository.   -­‐-­‐Launched  1981     FINRA:  An  SRO.  Works  with  and  is  overseen  by  SecuriBes   and  Exchange  Commission  
  6. 6. First  Screen
  7. 7. Star&ng  Your  Search Having  a  CRD  number  speeds  your  search.   CRDs  available  on  complaints,  arbitraBon   records   Click  for  person  
  8. 8. Get  Full  Name,  Middle  Ini&al,  Etc.   Get  Full  Name  of  Your  Broker.  Thousands   of  people  in  database,  may  take  Bme  to   find  right  person.  Filter  with  Zip  Code  
  9. 9. Robot  
  10. 10. Your  Turn   hOp://www.finra.org/Investors/ ToolsCalculators/BrokerCheck/  
  11. 11. Search:  “Bernard  Madoff”   hOp://www.finra.org/Investors/ ToolsCalculators/BrokerCheck/   Photo  by  Flickr  user  Petezin  
  12. 12. The  document    
  13. 13. For  Firms:   • Overview  of  the  firm,  and  ownership   • History,  including  any  mergers  or  name  changes   • Summary  of  firm’s  operaBons,  list  of  fines,  regulatory  acBons,   arbitraBon  awards     For  Individuals:   • Broker  credenBals,  current  registraBons,  licenses  and  exams   • Employment  history  for  the  past  10  years   • Any  customer  disputes  or  regulatory  events  on  the  broker’s   record.   Key  Items  on  CRD*  Reports   *Central  RegistraBon  Depository;  each  broker  and  firm  has  a  CRD  number.  
  14. 14. Employment  History  
  15. 15. Summary  of  Regulatory  Ac&ons,  Status  
  16. 16. Details  of  Ac&on   Get  to  source  material  
  17. 17. Details  of  Ac&on   Get  source  material  
  18. 18. Backgrounding     Source:  The  Washington  Post  
  19. 19. Contact  Former  Co-­‐Workers:  Work  History  
  20. 20. •  Unsuitable  Investments     •  Churning     •  10b5     •  Breach  of  Fiduciary  Duty    Photo  by  Flickr  user  Victoria  Reay   Red  Flags  
  21. 21. Use  BrokerCheck   to  Cover  PoliBcs   Your  Turn  
  22. 22. Search:   “Jon   Corzine”   hOp://www.finra.org/Investors/ToolsCalculators/ BrokerCheck/   Photo  by  Flickr  user  Paul  Lowry  
  23. 23. Terms  –  Jargon  Buster   hOp://www.finra.org/web/groups/industry/@ip/@comp/@regis/documents/ appsupportdocs/p116979.pdf    
  24. 24. Ques&ons  about  BrokerCheck?     • Nancy  Condon  –  202-­‐728-­‐8379  –  nancy.condon@finra.org     • George  Smaragdis  –  202-­‐728-­‐8988  –   george.smaragdis@finra.org     • Michelle  Ong  –  202-­‐728-­‐8464  –  michelle.ong@finra.org  
  25. 25. Investment  Adviser  Public  Disclosure   hnp://www.adviserinfo.sec.gov/IAPD/Content/IapdMain/iapd_SiteMap.aspx    
  26. 26. Who  Regulates  Advisers?   Dodd-­‐Frank  Act:  Boosts  states'  role  in  regulaBng  advisers     •  States  regulate  advisers  handling  between  $25  million   and  $100  million  of  assets  under  management.     •  SEC  oversees  handling  assets  of  $110  million     •  Both  can  be  found  in  Investment  Adviser  Public   Disclosure  database.   hnp://www.adviserinfo.sec.gov/IAPD/Content/IapdMain/iapd_SiteMap.aspx    
  27. 27. Form  ADV   Main  Disclosure  Form  for  Investment  Advisers     • Part  1:  Summary  of  adviser's  business,   complaints  from  customers.       • Part  2:  Brochure  to  clients  ,  details  adviser’s   business  pracBces,  fees,  conflicts  of  interest,  and   disciplinary  informaBon
  28. 28. Red  Flags   •  ArbitraBon  cases.  What   happened?       •  Employment  history.  RegistraBon   gaps;  where  were  they?     •  Brokers  can  peBBon  to  remove   arbitraBon  cases.       Photo  by  Flickr  user  Victoria  Reay  
  29. 29.   Ques&ons  about  Investment   Adviser  Public  Disclosure?     SEC  Office  of  Investor  EducaBon  and  Advocacy   1-­‐800  SEC-­‐0330  
  30. 30.  State  securi&es  regulators   North  American  SecuriBes  Administrators  AssociaBon     •  Always  worth  checking  with  state  regulators     •  Great  way  to  monitor  local  and  naBonal  trends  
  31. 31. State  Enforcement   hnp://www.nasaa.org/regulatory-­‐acBvity/enforcement-­‐legal-­‐acBvity/enforcement-­‐directory/    
  32. 32. A1  NYT  story   on  LPL   Financial  -­‐-­‐   Uses  state   regulators  as   sources   hnp://nyB.ms/14PiIdR  
  33. 33. Cer&fied  Financial  Planners   •  CFP  ®  designaBon   •  Must  pass  series  of  exams   •  Subject  to  oversight  of  CerBfied  Financial   Planners  Board   •  Investor  complaints  can  lead  to  CerBfied   Financial  Planner  revocaBon  
  34. 34. CFP  Board  website  lists  revoked  planners  by  state   hnp://www.cfp.net/about-­‐cfp-­‐board/ethics-­‐enforcement/disciplined-­‐individuals-­‐by-­‐state    
  35. 35. Search  for  a  Cer&fied  Financial  Planner     hnp://www.cfp.net/uBlity/verify-­‐an-­‐individual-­‐s-­‐cfp-­‐cerBficaBon-­‐and-­‐background  
  36. 36. Example  of  Disciplinary  Record  
  37. 37. CFPs  and  `Anonymous  Case  Histories’   Can  Be  Linked  to  Public  Sanc&ons  
  38. 38. Check  Disciplined  CFPs  in   NY,  NJ,  CT     hnp://www.cfp.net/about-­‐cfp-­‐board/ethics-­‐ enforcement/disciplined-­‐individuals-­‐by-­‐state     Your  Turn  
  39. 39.   Ques&ons  about  Cer&fied   Financial  Planners?     Dan  Drummond    202-­‐550-­‐4372     ddrummond@cfpboard.org  
  40. 40. Rob  Wells     University  of  Maryland,     Philip  Merrill  College  of  Journalism     robwells@umd.edu   Ques&ons?   Photo  by  Flickr  user  Xurble  

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