How are financial planners regulated?
by Julie Jason on Oct 12, 2018
According to the Financial Industry Regulatory Authority (FINRA, the regulator of the brokerage industry), “the financial planning profession does not have its own regulator. Instead, individuals who call themselves financial planners may be regulated in relation to other services they provide” (http://www.finra.org/investors/financial-planners).
For example, a financial planner who sells investments is regulated by FINRA as a broker. Someone who sells immediate annuities or life insurance would be regulated under state insurance laws. A financial planner who acts as an investment adviser is regulated by either the SEC (large firms) or by the state where the adviser does business (smaller firms).
Some services are not regulated. That is why it is essential to understand the scope of services you'll want your financial planner to provide you. To read more on this topic, see FINRA’s “So You Want to Hire a Financial Planner? Here’s What You Should Know.”
To look up brokers and SEC-registered advisers, go to https://brokercheck.finra.org/. To check someone’s insurance license, go to your state’s site (For example, California’s is https://www.insurance.ca.gov/0200-industry/0008-check-license-status/).
To look up state-registered advisers go to: http://www.finra.org/investors/state-securities-regulators.
Look for my column on this topic in a newspaper near you. If your paper does not carry the column, ask your local editor to contact King Features.