Website to Help Investors Recognize “Trusted Advisors”
WEBSITE TO RECOGNIZE ‘TRUSTED’ ADVISORS
A new investment website is using regulatory data about financial consultants to go beyond securities regulators’ databases to help investors determine whom to hire.
The Investor.com website just issued the “Trust Algorithm,” which is now available for unrestricted use. The tool scrapes background data on financial advisers retrieved from the Financial Industry Regulatory Authority Inc.’s BrokerCheck and the Securities & Exchange Commission’s Investment Adviser Public Disclosure sites.
How the Investor site works
The Investor.com algorithm sorts and weighs numerous variables to figure out whether a financial consultant or firm deserves a so-called trust badge. Consultants are deemed credible if they meet specific mandates, such as a small number of client disputes, financial disclosures and regulatory events.
The head of product at Investor.com, Blain Reinkensmeyer said the objective of the site is to assist customers inquire about consultant’s integrity.
“It’s about empowering Americans to ask the question,” Mr. Reinkensmeyer said. “Let’s help Americans find an adviser they can trust. The data doesn’t lie.”
The site is believed to utilize 23 million data points that are frequently revised. Mr Reinkensmeyer claims his site delivers better clarity and simpler access to regulatory data than the regulators do themselves.
“We built Investor.com with a mobile-first mindset,” said Mr. Reinkensmeyer, who is managing partner of Reink Media Group, a group of financial websites.
Feedbacks from Tests
A Chicago securities attorney and member of the Public Investors Arbitration Bar Association, Andrew Stoltmann, gave the site a user test.
“It’s definitely more user friendly than Finra’s BrokerCheck, so that’s a good development,” Mr. Stoltmann said. “It’s laid out in a manner that people won’t find opaque or confusing.”
Mr Reinkensmeyer does not conceal the reality that the site aims toward assisting investors to find a consultant who embraces fiduciary duty. The investor site says that 75% of investment adviser representatives attained the “trusted” identification, while 0% of broker-only registrants are labelled “trusted.”
“I believe in fiduciary advice,” Mr. Reinkensmeyer stated.
Knut Rostad, the president of the Institute for the Fiduciary Standard, endorsed the site.
”The site tackles misleading and muddled industry messaging on fiduciary status and what ‘best interest’ means. It goes beyond what BrokerCheck addresses. It gets to the guts of what consumers should be looking for to identify real fiduciaries.” Mr Rostad stated.
Pennsylvania & New Jersey Securities Law Firm
If you or someone you know has been the victim of broker misconduct or investment fraud, please contact our securities attorneys immediately for a free consultation toll-free at 215-462-3330 or by using our online contact form.