If there’s one thing we learned from Bernie Madoff, Allen Stanford and the countless perpetrators of the financial crisis, it’s that nobody’s word is worth trusting.

The parade of Ponzi guys and unindicted bankers of recent years has inspired a new enthusiasm for sleuthing by the public. There’s even a cottage industry of vetters willing to size up a broker if you aren’t inclined to do the work yourself.

The catch is, for all the new willingness of investors to ask questions before they hand over control of their nest eggs, what you discover in regulatory records may tell less than the whole story. As for the commercial websites that purport to know which advisers are good or bad, let’s put it this way: Most are free to investors, and there’s that issue of getting what you paid for.

Some investors go the do-it-yourself route and access BrokerCheck, a database operated by the Financial Industry Regulatory Authority, known as Finra, a self-regulatory organization financed by Wall Street. Others check websites with names like financialjoe.com and investorwatchdog.com that offer reviews of brokers and their firms.

Investorwatchdog.com, introduced in May, says its users “avoid costly mistakes, identify problems sooner and select advisors with the best qualifications.” Financialjoe.com says it “takes on Wall Street by empowering investors and allowing them to rate and monitor their financial advisors.”

Freebie Sleuths

Rely on the freebie sleuths at your own risk. If it were my money, I would be gathering facts from court and regulatory records, including Finra’s database. I will get back to those problematic broker-vetting websites in a bit. But it’s worth explaining that even BrokerCheck has shortcomings.

Finra does require disclosure of some red flags about a broker’s finances -- liens and bankruptcies, for example.

It doesn’t, however, demand that brokers disclose if they were sued in a matter that isn’t investment-related. Thus, although 253 former brokers from the bankrupt Stanford Financial Group Co. -- yes, that Stanford -- have been sued by a court-appointed receiver, they have no obligation to report that to Finra.

Ralph Janvey, the receiver in the 2009 fraud case brought by the Securities and Exchange Commission, is trying to recoup money those brokers made while they peddled Stanford’s securities. If you were thinking about hiring one of the former Stanford guys, you might like to know if they are on Janvey’s list: The broker on the receiving end of a big court judgment might have a lot of motivation to raid your account.

Robert Cornish, a Washington attorney who represents four Stanford victims, analyzed records of all 253 brokers and discovered that only 18 disclosed the lawsuit, which seeks to collect about $177 million from the group Cornish checked.

So BrokerCheck paints only a partial picture of a broker’s record. But it offers more than some of the vetting Web pages.

Consider investorwatchdog.com, run by former broker Jack Waymire in Lincoln, California. I was curious that investorwatchdog says it could help investors pick financial advisers “with the best qualifications” while cautioning in the fine print that it doesn’t review compliance records. So I queried Waymire by e-mail. He responded that the terms of service I had read the previous day had “out-of-date information.” Sure enough, after getting his response, I saw that investorwatchdog’s terms of service were changed from the printout I had made of its disclosures.

Waymire says advisers -- who pay to be featured -- have to get a score of 90 or better on his proprietary algorithm before they can be featured, though he sometimes makes exceptions for advisers who he says have been subject to “frivolous” complaints. It is worth noting that he is willing to lose business from risky advisers: He says he kicked a guy off his site on Aug. 30 for having huge tax liens.

Background Checks

I noticed that the site featured a California broker whose record included a fine by a state insurance department, a customer complaint and a termination. Waymire responded that the adviser had acknowledged his mistake and reimbursed an investor in one instance 30 years ago, and hadn’t hurt investors in the two others. Personally, I would pass on someone like that.

BrightScope Advisor Pages, which says it helps consumers “conduct due diligence,” also gets revenue from financial advisers who pay to be highlighted. When I asked Mike Alfred, the firm’s chief executive officer, about a featured broker who had a criminal record, he said in an e-mail that BrightScope was in the business of making information easier to find and use, but that “We are not in the verification business.”

The operators of these sites themselves have blots on their records, ranging from a failure to meet a state’s net capital rules at a brokerage firm a quarter-century ago (Waymire); to two customer settlements, one for $35,000 and one that was confidential, for Shawn Tierney, founder of financialjoe.com.

Waymire said his firm ultimately met Florida’s requirements. Tierney said he was no longer handling the account in question when one of the complaints was filed, and that an investigation in the other determined he had done nothing wrong.

Then there is the million-dollar claim against Alfred, his brother Ryan, the president of BrightScope, and Axa Advisors LLC, one of their former employers. In a BrightScope blog posting on May 16, 2011, Ryan Alfred said “we were not required to pay any of the settlement.” Finra records for each Alfred, though, describe an “individual contribution amount” of $30,000 to the $135,000 agreement.

It took a world-rocking financial crisis to get the public to be more serious about checking the claims of brokers. Four years after the crisis began, there still is no substitute for using BrokerCheck or state regulatory records; Finra’s arbitration database; lawsuits and liens on pacer.gov; and LexisNexis’s SmartLinx for state courthouse actions. If that sounds like too much work and too much financial outlay -- pacer and Lexis aren’t free -- go ahead and peruse the new sleuthing sites. But don’t kid yourself about who their customers are.

(Susan Antilla, who has written about Wall Street and business for three decades and is the author of “Tales From the Boom-Boom Room,” a book about sexual harassment at financial companies, is a Bloomberg View columnist. The opinions expressed are her own.)

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To contact the writer of this article: Susan Antilla at santilla@bloomberg.net

To contact the editor responsible for this article: James Greiff at jgreiff@bloomberg.net