Do You Know Your Broker’s Background?

The creditworthiness of another “finance guru” has been called into question and with good reason.

Emily Lambert wrote “Beware of Bambi” for the April 13 issue of Forbes Magazine.  The article discusses the regulatory troubles of famous financial adviser, Bambi Holzer.

Photo by powerbooktrance, courtesy of flickr

Ms. Holzer has written four books: Retire Rich, Financial Bliss, Getting Yours and Set For Life. She has an office in Beverly Hills and has appeared on national television shows to offer her financial expertise.

Ms. Holzer has hob-knobbed with celebrities and as a result of her professional practices, she has also been sued by two of them.  Knots Landing actress, Donna Mills sued Holzer in 2003 and Julia Louis-Dreyfus, formerly of Seinfeld, sued Holzer in 2007.

According to Forbes, Ms. Holzer has had 54 complaints filed against her by disgruntled customers and since 1990, her employers paid $11.6 million to settle the complaints.

Who would have thought that this trusted financial expert had been accused of churning, negligence, fraud and misrepresentation?  The more important question is how do you know if your broker has been accused of (or proven guilty of) similar activities?

Some people may point you to BrokerCheck, which is operated by the Financial Industry Regulatory Authority (FINRA). However, more information is available through the North American Securities Administrators Association (NASAA).

You can use NASAA to find your regulator and obtain a Central Registration Depository system (CRD) report on your broker. The CRD report will contain details about your broker’s history including disciplinary actions, convictions, and bankruptcies.

Remember, it is best to do your research before you hire a broker!