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.

1. Title Slide
Inves&ga&ng
Stock
Brokers,
Investment
Advisers
&
Financial
Planners

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. 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. 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. 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. First
Screen

7. Star&ng
Your
Search
Having
a
CRD
number
speeds
your
search.
CRDs
available
on
complaints,
arbitraBon
records
Click
for
person

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

10. Robot

11. Your
Turn
hOp://www.finra.org/Investors/
ToolsCalculators/BrokerCheck/

12. Search:
“Bernard
Madoff”
hOp://www.finra.org/Investors/
ToolsCalculators/BrokerCheck/
Photo
by
Flickr
user
Petezin

13. The
document

15. 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.

16. Employment
History

17. Summary
of
Regulatory
Ac&ons,
Status

18. Details
of
Ac&on
Get
to
source
material

19. Details
of
Ac&on
Get
source
material

20. Backgrounding
Source:
The
Washington
Post

21. Contact
Former
Co-­‐Workers:
Work
History

22. • Unsuitable
Investments
• Churning
• 10b5
• Breach
of
Fiduciary
Duty
Photo
by
Flickr
user
Victoria
Reay
Red
Flags

24. Use
BrokerCheck
to
Cover
PoliBcs
Your
Turn

25. Search:
“Jon
Corzine”
hOp://www.finra.org/Investors/ToolsCalculators/
BrokerCheck/
Photo
by
Flickr
user
Paul
Lowry

29. Terms
–
Jargon
Buster
hOp://www.finra.org/web/groups/industry/@ip/@comp/@regis/documents/
appsupportdocs/p116979.pdf

30. 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

31. Investment
Adviser
Public
Disclosure
hnp://www.adviserinfo.sec.gov/IAPD/Content/IapdMain/iapd_SiteMap.aspx

32. 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

33. 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

34. 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

35.
Ques&ons
about
Investment
Adviser
Public
Disclosure?
SEC
Office
of
Investor
EducaBon
and
Advocacy
1-­‐800
SEC-­‐0330

36. State
securi&es
regulators
North
American
SecuriBes
Administrators
AssociaBon
• Always
worth
checking
with
state
regulators
• Great
way
to
monitor
local
and
naBonal
trends

37. State
Enforcement
hnp://www.nasaa.org/regulatory-­‐acBvity/enforcement-­‐legal-­‐acBvity/enforcement-­‐directory/

38. A1
NYT
story
on
LPL
Financial
-­‐-­‐
Uses
state
regulators
as
sources
hnp://nyB.ms/14PiIdR

39. 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

40. CFP
Board
website
lists
revoked
planners
by
state
hnp://www.cfp.net/about-­‐cfp-­‐board/ethics-­‐enforcement/disciplined-­‐individuals-­‐by-­‐state

41. Search
for
a
Cer&fied
Financial
Planner
hnp://www.cfp.net/uBlity/verify-­‐an-­‐individual-­‐s-­‐cfp-­‐cerBficaBon-­‐and-­‐background

43. Example
of
Disciplinary
Record

44. CFPs
and
`Anonymous
Case
Histories’
Can
Be
Linked
to
Public
Sanc&ons

45. Check
Disciplined
CFPs
in
NY,
NJ,
CT
hnp://www.cfp.net/about-­‐cfp-­‐board/ethics-­‐
enforcement/disciplined-­‐individuals-­‐by-­‐state
Your
Turn

46.
Ques&ons
about
Cer&fied
Financial
Planners?
Dan
Drummond
202-­‐550-­‐4372
ddrummond@cfpboard.org

47. Rob
Wells
University
of
Maryland,
Philip
Merrill
College
of
Journalism
robwells@umd.edu
Ques&ons?
Photo
by
Flickr
user
Xurble