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Brightscope Publishes Financial Adviser Disciplinary Actions on New Website

BrightScope, a financial information company dedicated to bringing "transparency to opaque markets," launched a new website this week that features a searchable database of registered investment advisers designed to help investors find a competent, legitimate adviser and avoid investment fraud ("BrightScope Aims to Beat SEC, Finra Showing Adviser Disciplinary Actions," Bloomberg News, Apr 26, 2011).

The website, which is free to investors and currently features approximately 450,000 listings according to Bloomberg, includes information on: license status, regulatory actions, number of customer disputes, experience and employment history, professional designations, examination dates, total assets under management, average account size, and primary clients served. Search options allow investors to search for a particular person or to browse advisers/brokers by state, current employer, average account balance, total assets, or client type.

According to the article, Mike Alfred, BrightScope's co-founder and CEO, said the company plans to expand the website over the coming months. Plans include new listings for insurance brokers, adviser and broker performance histories, and searchable fee schedules. BrightScope also plans to "red flag" advisers and brokers who have disclosed conflicts of interest or who maintain personal control of client assets rather than using a third-party custodian, both of which could serve as warning signs for fraudulent activity.

The performance history reports and the listing of fee schedules mean investors should be able to use the website not only to check for disciplinary actions and customer disputes but also to determine whether an adviser or broker is competent and reasonably priced. According to industry professionals, this information - which is often hard to come by - could be extremely valuable to investors.

The information contained in The Firm’s posts on its blog, fraud alerts, investigations or elsewhere on the site is based upon information obtained from other sources including, but not limited to, news outlets and federal, state, and regulatory agency filings. All suspects and subjects of postings herein are presumed innocent until proven guilty in a court of law or administrative action and any and all crimes are alleged until a court or regulatory agency finds otherwise .

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