Five checks take less than an hour, and most investors never make them.
The mistake
Choosing an adviser on a referral or a good first meeting, without checking their record, how they are paid, or who actually holds your money.
The evidence
Only about one in five US investors say they have checked a financial professional’s background with a regulator, down from 24% in 2015. (FINRA Investor Education Foundation, Investors in the United States, 4th edition, December 2025)
The five checks
- FINRA BrokerCheck (brokercheck.finra.org): the firms a person has worked for, their licenses, and any customer disputes, disciplinary events or certain criminal and financial matters.
- SEC Investment Adviser Public Disclosure (adviserinfo.sec.gov): investment adviser firms and their representatives, including disciplinary history.
- Form ADV Part 2, the brochure. It is the adviser’s main disclosure document and explains fees, conflicts of interest and disciplinary information. Part 2B covers the individual adviser’s education and experience. (Investor.gov)
- Who holds the assets. Your money should sit with an independent custodian that sends you its own statements, not only reports produced by the adviser. Bernard Madoff’s clients relied on statements from his own firm.
- Fit. Ask how they are paid, whether they act as a fiduciary, what their investment philosophy is, and how they will measure whether it is working.
The tool: a due-diligence checklist
| Check | What you found |
|---|---|
| BrokerCheck: registrations and any disclosures | |
| Adviser Public Disclosure: firm, representative and any disclosures | |
| Form ADV Part 2 read: fees and conflicts | |
| Custodian name, and statements sent to you directly | |
| How they are paid, and whether they act as a fiduciary | |
| How they will report performance, and against what benchmark | |
| References or reviews checked |
How this is handled in practice
Start with Vivek: search CRD 6269307 at adviserinfo.sec.gov. He has no disclosures on Form ADV. For ten more questions and his answers, see 10 Questions to Ask a Financial Advisor. Investment management is offered through Gwynedd Wealth Partners, LLC.
Series · Ten common investor mistakes
- Whose plan are you following?
- Capacity, willingness and requirement: the three sides of risk
- Too concentrated, or too diversified?
- Why popularity makes value harder to judge
- The best days sit next to the worst days
- What you keep, not what you earn
- Do you know your real return?
- Plans fail quietly
- Five checks before you hand anyone your money
- Your savings rate: the lever you control
This article is for education and is not a recommendation to buy or sell any security. Investment advisory services are offered through Gwynedd Wealth Partners, LLC.