Ask and Check

Check Out the Seller

If a salesperson is trying to sell you an investment, check them out by following these steps.

Step 1: Ask "Are you licensed to sell me this investment?"

Legitimate investment professionals—including brokers, investment advisers and insurance agents—must be licensed with the Financial Industry Regulatory Authority (FINRA), the Securities and Exchange Commission (SEC) or your state securities or insurance regulator before they can sell you anything. If they say they aren't licensed, say good bye—and don't buy.

Step 2: Check.

If they say they are licensed, check them out as follows:

If They Say They Are a ... Look Here Helpful Hints
Broker
  • If you find the individual on BrokerCheck, click the "Get Details" button to the right of their name to view their summary report.
    Get Details
    The summary report provides information on the individual's employment history, qualifications, disclosure events and more. You can also download a detailed report on the individual.
  • To interpret what you find, see FINRA BrokerCheck Tips below.
  • Use both FINRA BrokerCheck and contact your state. There's helpful information in both places.
Investment Adviser
  • If you find the individual on BrokerCheck, click the "Get Details" button to the right of their name to view their summary report.
    Get Details
    The summary report provides information on the individual's employment history, qualifications, disclosure events and more. You can also download a detailed report on the individual.
  • To interpret what you find, see FINRA BrokerCheck Tips below.
  • If you find the firm on IAPD, click on its name to view its Form ADV (the investment adviser registration form).
  • For disciplinary information about the firm, scroll to the bottom of the page, and click "Item 11Disclosure."
  • If you find the individual on IAPD, click their name and click this button in the upper right side of the screen:
    BrokerCheck - View Detailed Report
    This will give you information on the individual’s employment history, qualifications, disclosure events and more.
Insurance Agent
  • Requirements and information available vary by state.
  • Be aware that "captive" agents can sell only the policies and products their company offers. Independent insurance agents typically represent multiple companies.

 

FINRA BrokerCheck Tips

Here are some helpful tips when checking out a salesperson using FINRA BrokerCheck:

How to search BrokerCheck: You may search for a person by name, CRD/SEC Number, employing firm or zip code.

If your Search returns too many results: You can narrow the search results you get by adding one or more of the search criteria noted above.

If you don't find the person in FINRA BrokerCheck (your search comes back as “No Search Results”), it can mean:

  • The person’s name is misspelled. You can refine your search by entering only part of the person’s name.
  • The individual is not included in BrokerCheck or the Securities and Exchange Commission’s Investment Adviser Public Disclosure database because he or she:
    • is not currently registered with FINRA or a state securities regulator, or has not been so registered within the last 10 years; or
    • has not been registered with FINRA or a state securities regulator within the last 10 years and either:
      • is not the subject of a final regulatory action;
      • has not been convicted of or pled guilty or no contest to certain crimes;
      • has not been subject to a civil injunction involving investment-related activity or been found in a civil court to have been involved in a violation of investment-related statutes or regulations; or
      • has not been named as a respondent or defendant in an arbitration or civil litigation in which he or she was alleged to have committed a sales practice violation, and which resulted in an award or civil judgment against the individual.
  • The investment adviser firm is not within scope for the Securities and Exchange Commission’s Investment Adviser Public Disclosure database because the firm is not currently registered with the SEC and/or a state securities regulator or been so registered within the last 10 years.

If you are still not able to find the person you’re searching for, please call the FINRA BrokerCheck Hotline at (800) 289-9999 and speak with a representative.

Check Out the Investment: Is It Registered with the SEC?

Take these steps to check whether a recommended investment is registered with the Securities and Exchange Commission (SEC):

Step 1: Ask the person offering the investment, "Is this investment registered with the SEC?"

If the answer is no, ask why the investment is not registered. Not all securities offerings must be registered with the SEC—such as those issued by municipal, state and federal governments. The SEC also provides exemptions for certain intrastate offerings and small public and private offerings under a rule known as Regulation D. For more information, read the SEC's Microcap Stock: A Guide for Investors.

Step 2: If yes, then use the chart below to help you check that this is in fact the case.

 

Where to Check What You Get Helpful Hints

SEC—EDGAR Company Search

Call the SEC's Office of Investor Education and Advocacy toll-free at (800) SEC-0330 if you have trouble using EDGAR or have questions about a company or investment.

  • Free public access to corporate information, including registration statements, prospectuses, annual reports with audited financial statements on Form 10-K and quarterly reports on Form 10-Q.
  • Information about recent corporate events reported on Form 8-K.
  • Confirmation of whether a company is using an exemption under Regulation D.
  • Read the SEC's tips for researching investments using EDGAR and other tools.
  • Be alert to changes in the company's name and trading symbol, reported through SEC Form 8-K.
  • Check if the company is filing current reports by looking for a 10-K report within the past year.

Your State Securities Regulator

 

  • Information about the investment beyond registration status, such as whether a promotion appears in violation of state securities law.
  • Ask if your state regulator is aware of any problems associated with the company or the type of investment.
  • You can also contact the North American Securities Administrators Association at (202) 737-0900.

Keep in mind that registration with the SEC does not guarantee that an investment will be a good one or immune to fraud. Likewise, lack of registration does not mean the investment lacks legitimacy. The critical difference is the extreme level of risk you assume when you invest in a company about which little or no information is publicly available. SEC registration carries a number of advantages for investors, including disclosure of financial and other information that can help investors assess whether to invest in a company's securities.

To check out the registration of the following types of investments, follow these steps:

 

Mutual Funds

Visit the SEC's EDGAR Mutual Fund Search. If you find the mutual fund there, then it is registered with the SEC.

Variable Annuities

Variable Insurance Products

Visit the SEC's EDGAR Variable Insurance Product Search. If you find your variable annuity or other insurance product, then it is registered with the SEC.

Exchange-Traded Funds (ETFs)

Exchange-Traded Notes (ETNs)

Closed-end Funds

Visit FINRA Market Data. Click on the link that says Company Information in the far left column to search for your investment. If you find the ETF, ETN or closed-end fund on Market Data, it is registered with the SEC.