BrightScope, an independent rating firm of 401(k) plans, announced Tuesday it had launched a background check service for the public to gain insight into the compliance history and performance of the nation’s registered brokers and advisors.
The site has 450,000 listings in its database so far, and includes information about customer complaints, judgments and terminations. Mike Alfred, co-founder and CEO of BrightScope, says the platform will eventually include advisor performance and fees, and will expand to include state registered insurance agents as well.
“This is a big step forward for the public when it comes to transparency in the financial services space,” Alfred says. “It will look like night and day in six months when compared with what we’ve released today. We eventually plan to add customer reviews as well, but they will be rigorous in their documentation, not just some advisor slamming his competitor.”
When asked if the new service is supposed to compete with similar databases compiled by the SEC and FINRA and offered to the public, Alfred responded with an emphatic “no,” and noted the regulatory agencies had done a notoriously bad job in offering background checks and red flags on advisors to the general public.