Can I Trust My Broker?

Can I Trust My Financial Advisor?

The short answer to this question is, it depends — who is your broker?

You might think you know who’s investing your hard-earned money because you meet and talk with them on the phone now and then. But how do you really know you’re dealing with a financial advisor you can trust? Or at least, one who isn’t an outright crook?

Do a Background Check on Your Stock Broker

The most important single thing you can do to protect yourself against bad brokers is to do a background check. Nowadays, we do background checks on employees, even babysitters… And yet the idea of doing even a cursory background check on a stock broker seems far from people’s minds. This is a problem.

A recent action brought by the securities industry self-regulator, FINRA, highlights the issue. A bad broker who was banned from the securities industry managed to get 280 clients over a period of almost fifteen years to invest tens of millions of dollars through him.


For one thing, after he was banned, he got his wife to obtain a license through FINRA so that he could keep trading. But it wasn’t his wife who was meeting with clients. It was him. The whole time. Two hundred and eighty clients continued to trade with this broker years and years after he’d been banned from industry for misconduct.

FINRA’s Database Gives You Powerful Information about Your Broker

What allowed this shocking situation to develop is the fact that the investors trading with the banned broker presumably never did even a basic background check on this individual. FINRA has spent years and millions of dollars compiling an expansive database of information about brokers. It tells you which brokers are registered, which ones have been banned, which have been involved in customer disputes, terminations, even bankruptcy. It’s all there on the web,, easy to find and searchable.

So what’s the problem?
For one thing, investors don’t know they can do a background check on their broker. For another, for reasons that many of investors come to regret, they trust their financial advisors implicitly and fail to do the kind of simply background check you might do before, say, checking into a hotel or going to a restaurant.

Doing a background check on your broker is that easy. And it can save you a tremendous amount of grief and money in the event of a dispute. In order to visit FINRA’s broker database, click here.

Pennsylvania & New Jersey Securities Litigation Firm

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If you or someone you know has been the victim of investment fraud or broker misconduct, please contact our attorneys immediately for a free consultation at 215 462 3330 or by using our online contact form.