In the United States alone, there are more than 16,000 registered investment firms and over 680,000 licensed individuals who can provide financial advice.
Reviewed financial advisor firms that meet our strict requirements earn the investor.com badge of Trust.
We collect data from sources that may include:
Here's a summary of the regulatory and proprietary data** we collect to review Registered Investment Advisor (RIA) firms:
|Years Registered (SEC IAPD)|
|Conflicts of Interest|
|Attorney Conflict (ADV Part 1 Items 6.A.13, 7.A.11)|
|Broker/Dealer Conflict (ADV Part 1 Items 6.A.1, 7.A.1)|
|Commissions Compensation Conflict (ADV Part 1 Item 5.E.5)|
|Insurance Affiliation Conflict (ADV Part 1 Item 6.A.6)|
|Insurance Agency Conflict (ADV Part 1 Item 7.A.12)|
|Private Investment Management (ADV Part 1 Item 8.B.2)|
|Proprietary Investments (ADV Part 1 Item 8.A.3)|
|Soft-Dollar Benefit Conflict (ADV Part 1 Item 8.G.1)|
|Trades Recommended Securities (ADV Part 1 Item 8.A.2)|
|Activity Restriction (ADV Part 1 Item 11.E.4)*|
|Attorney/Accountant Authorization Revocation (ADV Part 1 Item 11.F)*|
|Business License Revocation (ADV Part 1 Items 11.C.3, 11.D.3, 11.E.3)*|
|Court-Ordered Investment-Related Prohibition (ADV Part 1 Item 11.H.1.A)|
|False Statements or Omissions (ADV Part 1 Items 11.C.1 11.D.1, 11.E.1)*|
|Felony Convictions or No Contest Pleas (ADV Part 1 Item 11.A.1)|
|Investment Related Misdemeanors (ADV Part 1 Item 11.B.1)|
|Investment Related Dismissal upon Settlement (ADV Part 1 Item 11.H.1.C)|
|Monetary Penalty (ADV Part 1 Item 11.C.5)*|
|Orders Entered (ADV Part 1 Items 11.C.4, 11.D.4)*|
|Registration/License Revocation (ADV Part 1 Items 11.D.5)*|
|Regulation Violations (ADV Part 1 Items 11.C.2, 11.D.2, 11.E.2, 11.H.1.B)*|
"99.2% of all financial advisors barred from the industry have been either a broker or dually registered advisor." (investor.com, dataset source: FINRA, June 2020)
"In a study assessing 7,079 SEC-regulated Registered Investment Advisors (RIAs) over a 12 month period, 24.8% of firms offered funds with 12b-1 fees." (investor.com, dataset source: SEC, July 2019 to June 2020)
"In an assessment of 16,500 federal and state Registered Investment Advisor (RIA) firms, 2,157 (13.1%) have a broker-dealer conflict." (investor.com, dataset source: SEC, July 2020)
"In a study assessing 16,411 Registered Investment Advisors (RIAs), total AUM was $51.4 trillion, of which 99.5% is managed by SEC-registered firms." (investor.com, dataset source: SEC, July 2020)
How do financial advisors make it onto investor.com's directory?
Our searchable database of U.S. financial advisors represents more than 16,000 individuals and firms across the country. We pull regulatory filing data on each of these firms every month to update the information you see.
To qualify for inclusion in our database, advisors must meet specific criteria, which include doing the following:
• Be located in the U.S.
• Conduct financial planning and/or portfolio management.
• Be actively registered with the SEC or a state, per their IAPD page.
• Have filed an important regulatory document called ADV Part 2.
• Charge compensation that is fee, hourly, or commission-based.
Within this directory of advisors is a subset of firms that have earned investor.com's Trusted badge, an indicator that that advisor has met even stricter requirements that signal trustworthiness and stability. Read on for more about our Trusted badge.
Can financial advisors be trusted?
Wouldn't it be nice if we could give you a simple, unequivocal yes to that question. Sadly, the truth is some advisors can't be trusted. The name Madoff ring any bells?
Luckily, there are signs that will help you figure out if you're sitting across from a trustworthy financial advisor or the next Charles Ponzi. At minimum, a trustworthy financial advisor will:
• Answer your questions — in a way you understand.
• Ask about your big-picture goals — not just how much money you're going to invest.
• Explain how they get paid in a way that's clear to you.
• Respond with a simple "yes" when you ask if they're a fiduciary.
• Talk about their approach to risk — without downplaying your concerns.
• Invest in products that you understand.
• Be free of disciplinary marks against them.
If you're wondering about that last point — how to tell if an advisor has been caught filching clients' money or committing other wrongs — read on.
How can you find a financial advisor that you can trust?
Here's an easy way to search for a trusted advisor: Use the search tool on investor.com to find an advisor who's earned our Trusted badge. These are vetted pros (see the next section below for more on what our Trusted badge means).
There's another way to use our search tool as well: Enter any advisor's name and, if they're registered with the SEC, generally our tool will give you a quick summary of their business. As a bonus, you'll be able to see if they've been disciplined for any wrongdoing. We pull data from regulatory filings every month to let you know that advisor's current standing. (You're welcome.)
But — sorry to break the bad news — your work finding a trusty advisor doesn't end there. Your next to-do is to interview potential advisors to make sure you understand where they're coming from. It's not like you're just going on a coffee date with this person. Nope, it's more serious: You'll be sharing the details of your financial life. An initial interview is essential. Here's a cheat sheet for what to ask at that meetup.
1. Are you a fiduciary?
This isn't a complicated question. You're looking for a simple "yes" here. The advisor starts making excuses? Buh-bye.
2. How do you get paid?
Look for an advisor who's fee-only. That means you pay a fee for services, nice and simple, and there are no commissions embedded in the products the advisor pitches to you.
3. What other fees will I pay?
You know you'll have to pay the advisor for services, but be sure to also ask about any underlying product fees — you want to compare advisors based on your all-in costs.
4. What are your qualifications?
Don't assume the alphabet soup of letters after your advisor's name means much for the long-term sustenance of your money. Ask the advisor about their credentials, and check out this designation tool on Finra.org to figure out what's what.
5. Do you have experience with my situation?
Whether you're looking for help investing, building an estate plan, making financial plans for your growing family — whatever your situation is — make sure the expert in front of you has at least some experience with that particular situation.
What does being a trusted financial advisor mean?
Speaking generally, a trusted financial advisor is one who works with you to manage your financial life in a way that works best for you — all while refraining from stealing your money. Finding an advisor who's both a fiduciary and fee-only will go a long way to increase your chances that you're working with a legit pro.
But why not take it a few steps further and look for a capital-T Trusted advisor? Any financial advisor on our site that has a Trusted badge has been vetted as follows:
We collected thousands of regulatory filings from the SEC, amassing more than a half-million data points, and used that data to build our trust algorithm. We pull regulatory filing data every month to update the details for each advisor in our search tool.
To earn Trusted status on investor.com, financial advisor firms must meet our strict requirements, beginning with earning a 4.5- or 5-star rating based on our independent analysis. Among specific factors considered for establishing Trusted status are the firm's years in business, conflicts of interest, disciplinary history and the security of its website.
That adds up to some seriously good sleep at night.
We have submitted an updated FINRA or SEC ADV filing. When will the changes be reflected on investor.com?
Primary data checks take place at the beginning of each month and most pages are updated within the first week.
Some of the questions recommended to Americans to ask are addressed in our SEC ADV Part 2 or Form CRS filing. We would like your team to review our regulatory data.
To have your information professionally checked by our data team, visit your profile page, then click the link, "Have your data reviewed."
We see that we are rated as a top firm in our state. Is there an additional fee to license the award badge for external use?
No. As a consumer advocacy project, we do not charge any licensing fees for earned state accolade badges.
1. First, we collect all publicly accessible data made available by the Securities Exchange Commission (SEC).
2. Variables are strategically selected to be incorporated into the Trust algorithm.
3. Variables are then sorted and weighted individually based on their significance and the net impact on Americans.
4. Once all the data is collected, sorted, and weighted, the Trust algorithm goes to work to determine a star rating. Firms that earn a 4.5 or 5 star rating are also eligible to receive the "Trusted by investor.com" badge.