BrightScope, a financial information company dedicated to bringing "transparency
to opaque markets," launched a newwebsite 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
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.