Financial Advisors

Worked in industry 19 years. 17 years without a single blemish on my crd. Couple illiquid reit's I put professional athlete clients into,in 2008. Fired the clients in 2011,2012 for refusing...continue

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The only reason our disciplinary system is so unfair against advisors is because we have ZERO representation or advocacy. FSI, Sifma, all of them lobby for the big firms, not us. I’d love to see a “brokercheck” system implemented for members of Congress. A client can make a completely baseless claim, ignoring all documentation and forms that they signed, and it’s still a black mark on the advisor. If Finra wants brokercheck to be useful, expunge irrelevant and inaccurate disclosures. Otherwise, how is the investing public supposed to decider which “red marks” are bad and which “red marks” are meaningless.

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This is a great example of why I have not done an illiquid investment for clients in over 30 years (although I will admit to a few in the first few years of my 38 year career. If you are totally liquid you can end a relationship by 4:00 today. Your nightmare is you fire the client and five years later you still have to take the call asking “where is the K-1” or “how is our investment doing”. Having a complaint about the liquidity is even worse.

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I helped atty's for bd every time they called or needed anything. Get a call and they tell me thanks for all the help, but the former client wanted to settle for $110k, instead of $1.3mill initial. Told them they were out of their mind, we did nothing wrong. They responded, it will cost your old bd more to go through arbitration than to settle... we work for them, and we settled. It's insane we can have our names and years of playing by the books smeared, when we aren't named on a claim, and can't even defend ourselves, legally. Wondering if I should consider legal action against the clients?Any thoughts or waste of time?

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@carrollfinancial That's no lie! I fired those clients 6 years ago, and still get calls every year about k-1's. I have up my serious 7, 2 years ago to be a true fiduciary...and those co's still have me on those statements as the rep of record. Yes, I will Never even discuss an illiquid alternative investment, reit, equipment leasing, secured collateralized notes, etc EVER! An entire career that took over 16 years to establish a flawless record can be wiped out with a client who suddenly has amnesia,lost the investment savvy knowledge they once bragged to you about. All it takes is an unscrupulous hungry new attorney looking to make a name for themselves. After researching this, I discovered there's close to a 77% of reaching a settlement on complaints filed against those in our industry. Think about that... they know going in they have a 77% chance of getting some type of payout, if they can procrastinate, and prolong the process. 77%! I have always attorney in the past, but they've made this industry to where no client is held accountable, because reaching a settlement is more probably than an arbitration. They know their numbers and know is more cost efficient to settle, than actually look at whether something unethical has been done. Not one of those clients mentioned any of the millions of dollars we made them on the test of their investments... just the ones they can't get to now, that they're broke. But it's encouraging to hear you're still in the industry, 30 years later. I seriously contemplate leaving the business all together. I have no other skill set, this is the only thing I've done since the age of 23. But putting my heart into every client, only to know they can make a claim against my old bd and it v will affect me for the rest of my career. How do you deal with that aspect of having disclosures on your crd, when someone looks you up? The three people who have actually brought it up to, I was eager and happy to discuss with them. This was my side of it, and what resulting in the complaint being made. I've even thought about laying it all out there to be clients, before they ever come in for a first mtng...just full disclosure, I have nothing hide.

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I can’t help you with your question. I have to ask, why put a client in an ill liquid REIT instead of using a reit mutual fund or UIT? Just asking for Better product knowledge.

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@wellsfargo1 at the time (market correction 07-09) publicly traded Reits had been hit hard. I can't remember exact volatility,but there was quite a bit of volatility involved. The public, Non-traded reit didn't have the correlation of publicly traded Reits. (Didn't have to worry about People selling on emotion, etc.) Plus, some of the non-traded Reits would collateralize property, which also wasnt the case with publicly traded liquid Reits. Hope that's helpful. Moral of the story... never invest into a non-traded reit. The "CYA" system of taking notes, logging conversations, having the compliance dept. Sign off, client sign off to acknowledging the illiquid factor... was minimally affective.

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@wellsfargo At the end of the day, bd looks at it as $''s and cents...not right or wrong. If they can settle more cost effectively than going to arbitration, then reps reputation gets sent to back of the bus.

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@retirment income blueprint I wish we could record our conversations to protect ourselves or just have cameras in our office that records everything. ( sound and video)That would be great in case where someone comes back and files a complaint.

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@ pension consultant. Jthill7@gmail

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Yes...this happened to my biz partner...not sure how to take this convo off line

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@regionalvp. I agree 100% I've actually spoke with a group who lobbies for special interest. I think you hit the nail on the head. He asked me if there was anything I felt was missing in or industry for consideration. I think you just turned the light switch on. I think it would take much more than 1 or 2 of us to make any meaningful impact. We'd need to form a group of advisors to have a louder voice going to these lobbyist to represent the advisors to Congress.

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Don't let it get you discouraged. It sucks but it's not the end of the world. Have a quick two three sentence explanation for the 1% who will actually look at broker check.

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I don’t know what legal action you can take if it’s already been settled. You would have a better chance of going after your old BD, instead of the clients. I just think in today’s environment you would get more “favorable” outcome with going after the big bad firm than the client.

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@morganstanley I read an article last week saying how difficult it was to hand finra expunge anything. Could have just been that particular guys circumstances, but was pretty gloomy on the odds of that happening. Thanks for kind words & input from everyone. A lot of great things to consider

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You can get it expunged!

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"Gave " up "series" 7. Several other auto corrections in there, but still legible. Sorry about that

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This sounds like “one of those horror stories” that’s in the back of the minds of many of us. I imagine many people can relate to this in some way... a client makes an accusation which after reviewing notes together they realize they misremembered.

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To follow repeated attempts for them to budget, over prior 2-3yrs. They were broke by 2016, spent through close to $30mill. Reit was illiquid. They got atty. Sued my old bd for unsuitable investment. They still haven't lost any $. Signed acknowledgement 4 didn't times they knew investment was illiquid. 17 years of work smeared! I'm not even named in complaint, but mentioned as the rep of record. Any suggestions on how to address this?

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