Where Advisor-Firm Risk Really Concentrates: PlainAdvisorCheck's Size-Normalized Grade Distribution

Findings

14,984 firms earn an A; only 250 land an F

PlainAdvisorCheck's register carries 80,028 discovered firms from the combined SEC Investment Adviser Public Disclosure and FINRA BrokerCheck search index; 20,055 have a confirmed FINRA detail record and receive a grade, while the remainder are discovered but not yet individually verified and are left ungraded rather than defaulted to a clean record. Among the 20,055 confirmed firms, 14,984 (75%) carry no reportable disclosures and earn a Grade A. The remaining 5,071 firms hold at least one disclosure and are graded on their disclosure intensity relative to same-size peers: 3,006 earn a B, 1,078 a C, 737 a D, and 250 an F. FINRA BrokerCheck, Broker-Dealer Registration and Disclosure The full distribution is visible on the grade overview, and every firm's underlying record is in the firm directory.

Across the 20,055 confirmed firms, the register holds 41,823 total disclosures, split into 30,904 regulatory events, 10,482 arbitrations, and 437 civil events. Regulatory actions, sanctions brought by the SEC, FINRA, or state regulators, dominate the mix. PlainAdvisorCheck ingests these category counts verbatim from the source and never alters the tallies; the grade is the only layer added on top.

Because most confirmed firms are small and carry no disclosures, the A grade is the norm rather than a distinction. The signal lives in the graded tail: the 2,065 firms graded C, D, or F are the ones whose disclosure record stands out relative to firms of their size, and the 250 F-grade firms sit in the worst 5% of disclosing firms within their size class.

The heaviest grades fall on small firms, not the big national names

This is the counterintuitive result of size-normalization. Sorted by branch-office footprint, firms with 50 or more branches account for just 3 D or F grades; mid-sized firms (5–49 branches) contribute 45; and firms with fewer than five offices account for 939 of the 987 total D/F grades. The heaviest disclosure records, once measured per office, belong overwhelmingly to small operations.

The large national broker-dealers carry substantial disclosures in absolute terms, UBS Financial Services Inc. (926), J.P. Morgan Securities LLC (547), Edward Jones (325), and Charles Schwab & Co., Inc. (318) each report hundreds, yet they grade C, B, B, and C respectively, because those disclosures are spread across thousands of branch offices. Edward Jones, for example, reports 325 disclosures across more than 18,700 offices, a low intensity per location. A small firm with a handful of regulatory actions across two or three offices registers a far higher intensity and grades accordingly.

This inverts the naive "big firm equals more risk" intuition. Raw disclosure counts track firm size almost mechanically, more offices, more reps, more reported events. Normalizing by footprint strips out that scale effect and surfaces the firms whose conduct record is genuinely heavy for their size. That is the whole point of grading on intensity rather than on headline counts.

F-grade firms are scattered, often without a reported home state

Because the heaviest-graded firms are small, they do not cluster in the financial-center states the way raw disclosure volume does. Of the 250 F-grade firms, the largest single group, 237, carry no reported principal-office state, consistent with small or deregistered entities whose address details are sparse in the public record. Among firms with a stated location, New York leads with 5, followed by Illinois with 3, Pennsylvania with 2, and Arizona, New Jersey, and Texas with one each.

This stands in contrast to the geography of raw disclosure volume, which does concentrate in New York and other headquarters states simply because the largest firms are based there. The grade map and the volume map tell different stories on purpose: one reflects where the big firms sit, the other reflects where disclosure intensity is genuinely elevated.

Investors comparing two firms should therefore read the grade and the absolute counts together. A large firm with a B grade may still carry hundreds of disclosures worth reviewing; a tiny firm with an F may have only a handful of events that loom large against its small footprint. Both numbers are shown side by side on every firm page.

How the grade is computed

A firm with zero reportable disclosures earns an A regardless of size. For firms that do carry disclosures, PlainAdvisorCheck computes a severity-weighted score, regulatory events weighted most heavily, then arbitrations, then civil events, and divides it by the firm's branch-office count to get a disclosure intensity per office. Each disclosing firm is then ranked against same-size peers, with the top 5% by intensity receiving an F and the rest distributed across B, C, and D by percentile. The exact weights are published on the methodology page.

Branch footprint is the size measure because FINRA's public firm API reports a branch-office count for every firm but does not publish a firmwide registered-representative headcount. Footprint is an imperfect proxy, it does not capture client count or assets under management, but it is available consistently across the entire register, which a headcount is not. PlainAdvisorCheck reproduces the underlying FINRA and SEC data exactly; the size-normalized grade is the single editorial layer, offered as a screening signal rather than a regulatory determination.