A fintech startup whose founders say they're fed up with
AIMR Analytics' new website,
By mid-March, AIMR plans to roll out a paid service with deeper background checks while keeping the free search tools intact, co-founder KJ Kim said in an interview. Eventually, the fintech, based in Englewood Cliffs, New Jersey, aims to work with wealth management firms to help them monitor the regulatory dings of their advisors as well.
"Our ultimate goal is to empower every investor with clarity and transparency so they can make informed decisions about their own finances. Our founders recognized a lack of transparency when it comes to advisor-related information," Kim said. "There are a few bad actors out there who paint a grim picture for a lot of investors."
As the primary source of public information about the records of advisors and the firms employing them, BrokerCheck and the IAPD website have added many new features over the past two decades that enable investors to see, for example, whether a broker has been
Critics have pointed out problems with the timing and spottiness of
Regulators have tried to find a balance between the need for investor protection and public information and the presumption of innocence in legal cases. Other attempts to create regulatory and enforcement databases
The initial version of AdvisorCheck shows users much of the same information that's already available on BrokerCheck, which includes client correspondence "interpreted as a complaint" by FINRA or a brokerage firm's compliance department, according to Doc Kennedy, an
A similar scenario could play out if a broker mistakenly omits a dismissed misdemeanor charge from decades ago when filling out a state registration form asking if they have ever been arrested or convicted of a crime.
"I would remove stuff like that, and I would explain to the users that you can go get all this information on BrokerCheck," Kennedy said. "Most of the information there is confusing, and it doesn't help you. It just muddies the water."
Regardless, Kennedy said there is ample opportunity for a fintech to present regulatory information in a new way that makes it more succinct and more "easy to digest" than the SEC and FINRA websites.
AIMR Analytics has been developing AdvisorCheck for the past three years after a seed funding round of $1.3 million, according to Kim. He's an engineer who spent time as an equity trader earlier in his career, and other members of the founding team come with experience as the managing member of a wealth management firm, a trader on a billion-dollar desk and the CEO of a financial firm.
"After spending decades working in the financial services field, we witnessed tens of billions in annual investor losses due to advisor misconduct,"
"Disheartened to see brokerage firms and intermediaries continue to deliver unethical and biased advice, we were determined to give the power back to you."
In addition to the data from BrokerCheck and the SEC database, the site contains details from the organizations respectively overseeing certified financial planners, certified private wealth advisors, chartered life underwriters, certified investment management analysts, chartered financial consultants and accredited investment fiduciaries. Users can search by an advisor's name or go through lists of professionals in any ZIP code by industry designations and years of experience.
Files for each of the hundreds of thousands of registered brokerage and registered investment advisor firm professionals list their experience, any disclosures and a "firm profile" with the amount of assets under management, average account size and the ratio of clients to employees. The files also have the names of direct owners and executives.
Many of those facts and figures would require digging through lengthy disclosure documents on BrokerCheck or the SEC site and doing individual calculations.
Despite "built-in conflicts of interest" at FINRA from collecting membership fees from the brokerages it regulates, BrokerCheck and the SEC website are "actually not bad," Kim said. Still, while both databases have "a lot of information there that's useful," it can be difficult to toggle between the two websites and documents up to 100 pages long, he said. Few clients would be likely to read SEC Form ADV, the annual filings that feed the regulator's website.
"They kick you back and forth. We aggregated all of that into one platform," Kim said. "It's vital information. It matters, but it's presented in a format that no one wants to read."
AIMR expects to update its user interface and experience next month, followed by the release of the deeper, paid search service with "AdvisorCheck Plus" around March. In the second quarter, the company will begin a beta program for financial professionals to create free profiles with customer testimonials, which became legal for advisors to use under
"We're not here to discredit anyone. We're here to bring about transparency, in turn driving volume to the service area in general," Kim said. "They can promote their business, but we'll fact check their claims."
