Registration is the single fastest thing to verify about a financial advisor, and an unregistered person giving investment advice for compensation is a serious problem rather than a technicality. Both places you need are free and public. Search the advisor's name at adviserinfo.sec.gov and at brokercheck.finra.org. The report opens with current registration status, the firm they are registered through, and the states where they are approved to do business.
What registered actually means
Registration means a regulator has the advisor's information on file, has cleared them to do business, and can act against them. It does not mean the regulator has endorsed, approved, or vetted the quality of their advice. The SEC is explicit about this. Registration is the floor you should refuse to go below, not a signal of excellence.
Who registers with whom?
Investment advisory firms register either with the SEC or with a state securities regulator, and which one depends mainly on how much money the firm manages. Larger firms register federally with the SEC. Smaller firms register with the securities regulator in the states where they operate. Individual advisers at those firms are usually registered as investment adviser representatives in the states where their clients live. Someone selling securities products on commission registers separately through FINRA. None of these are better or worse than each other, but knowing which applies tells you where to look and who to complain to.
What if the advisor is not listed?
Search variations of the name before concluding anything, including a maiden name, a shortened first name, and the firm name on its own. People are listed under their legal name, not the one on their business card. If they still do not appear anywhere in either database and they are giving investment advice for compensation, stop and ask them directly for their CRD number and the name of their registering firm. There are legitimate explanations, such as an advisor who only does insurance or only does tax work and is not offering investment advice at all. There are also illegitimate ones.
What else should I check at the same time?
While the report is open, read three more things. Read the disclosure section for customer disputes and regulatory actions. Read the employment history for a pattern of short stays. Then open the firm's Form ADV Part 2A, which is linked from the IAPD report, and read how the firm is paid and what conflicts it discloses. Registration status takes thirty seconds. These take ten minutes and tell you considerably more.
Does registration make someone a fiduciary?
Not by itself. An investment adviser representative at a registered investment adviser owes a fiduciary duty. A registered representative at a broker-dealer is held to Regulation Best Interest, which is a weaker standard that still permits recommending a higher commission product. Both are registered. Only one is a fiduciary at all times. That distinction is the whole reason to check which registration a person actually holds rather than accepting the word advisor at face value.
