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Better Background Checks For Financial Professionals

(Reuters) – A panel of investor advocates said on Thursday they were developing a proposal for U.S. securities regulators that will make it easier for retail investors to conduct online background checks of financial professionals before hiring them.

The Securities and Exchange Commission’s Investor Advisory Committee discussed the recommendation amid concerns about elderly investors who are often prime targets for fraudsters.

It plans to vote on its recommendation in July.

Currently there are several databases that investors can use to look up the backgrounds of financial professionals.

The BrokerCheck database, run by the Finiancial Industry Regulatory Authority (FINRA), lets investors look up brokers to see their employment history, professional licenses and any disclosures such as customer complaints that were arbitrated, criminal convictions, civil regulatory actions or personal bankruptcies.

A second database operated by the SEC called the Investor Advisor Public Disclosure Program, meanwhile, compiles data about investment advisers registered with the SEC and the states.

Although anyone who searches these two databases can derive results from both, they are not equal in the quality of the data available.

Read Full Article: http://www.reuters.com/article/2015/04/09/sec-badactors-background-idUSL2N0X616220150409