Verifying a financial advisor's background isn't difficult, and it doesn't cost anything — most people simply don't know the tools exist. Two official sources cover almost everyone practicing in the United States.
The SEC's Investment Adviser Public Disclosure (IAPD)
IAPD is the SEC's public database for investment advisers and their firms. Searching it shows an advisor's registration status, the firm they're associated with, their Form ADV filing (which discloses fees, conflicts of interest, and disciplinary history), and any regulatory actions on record.
FINRA BrokerCheck
BrokerCheck covers brokers and brokerage firms registered with FINRA. It shows licensing history, employment history, and — critically — any customer complaints, regulatory actions, or terminations. If an advisor is dual-registered as both an investment adviser and a broker, it's worth checking both databases.
State securities regulators
Advisors managing smaller amounts of assets are sometimes registered at the state level rather than with the SEC. Your state's securities regulator can confirm registration and licensing for advisors who fall under state rather than federal oversight.
What to actually look for
- Current registration status
- Disciplinary history or customer complaints
- Terminations for cause
- Licensing in your specific state
What this means for you
Registration status confirms the advisor is who they say they are. Beyond that, pay attention to disciplinary history, customer complaints, and terminations for cause — a single old complaint isn't necessarily disqualifying, but a pattern is worth taking seriously.