As a financial advisor, your professional reputation means everything. In order to serve your clients, you need to inspire trust and confidence in your ability to protect their best interests and investments as much as possible and before all else. While the Financial Industry Regulatory Authority (FINRA) works hard to protect the interests of the investors, it errs on the side of caution in ways that can wreak havoc on a financial advisor’s reputation and livelihood. Any customer complaint or dispute information regarding a specific advisor or member firm is entered into the Central Registration Depository (CRD), even if the information is incomplete, inaccurate, baseless, or downright false. From there, the disclosure is made available to the public via a searchable database known as BrokerCheck. This means that a potential client can look at the advisor’s profile and see these disclosures and other concerning information, which will likely negatively affect their view of the advisor and look for a professional whose BrokerCheck profile has fewer “red flags.”
If your BrokerCheck profile has been hit by unfair customer dispute information or other concerning disclosures, it’s worth discussing the specifics of your situation with a highly qualified and trusted securities law attorney who can help you explore your options for addressing this issue. In some cases, it may be worth filing an expungement request through FINRA to have the information removed from the CRD and BrokerCheck. Let’s take a look at the many ways that disclosures can affect a financial advisor’s professional livelihood and some of the steps you can take to regain control of your life and fight back against these inaccurate complaints.
Increased SEC Disclosure Obligations and Their Impact on Advisors
Within the last several decades, the regulatory bodies like FINRA and the Securities and Exchange Commission (SEC) have tightened their disclosure requirements for member firms. With each new rule and obligation, advisors have faced increased scrutiny and a more substantial burden to meet these requirements in a timely manner. From creating and updating disclosure documents to training staff on the most recent disclosure protocols, many firms are finding it difficult to find the time and resources to keep up. Moreover, these disclosure requirements are intended to build public confidence and encourage transparency—but the actual impact of disclosing every detail can end up having the opposite effect. For instance, disclosing past disciplinary actions to clients can lead to uncomfortable conversations, especially if the incident involved an unfair or baseless allegation against the advisor. For some clients, knowing that the advisor has a mark on their history (even if it was unfair or completely unrelated to their ability to uphold their professional obligations) can be enough to erode trust and send the clients elsewhere. If you are struggling with the impact of disclosures or you are interested in learning more about how disclosures affect advisors, reach out to a highly trusted and experienced securities law attorney today.
Measuring the Impact of Customer Complaints on Financial Advisors
Another topic that can affect an advisor’s career and livelihood is customer complaints that are reported to FINRA and then added to the CRD and BrokerCheck. Suddenly, your profile displays customer dispute or complaint information, even if you object to its accuracy. Since FINRA aims to protect the public, it is willing to take customer complaints seriously and at face value without thoroughly investigating the nature of the complaint before it’s added to the CRD and BrokerCheck. Below are just a few of the ways in which a customer complaint can affect a financial advisor and the member firm where they are employed.
Professional Reputation
Any negative complaints or those that question the integrity of a financial advisor can have a considerably adverse effect on the advisor’s professional reputation. Even if the allegations or information are false or inaccurate, the public will likely avoid working with the advisor out of an abundance of caution. Over time, this decline in one’s reputation can make it extremely difficult to attract new clients or keep existing ones.
Financial Losses
Without a steady roster of clients who trust you, you will not be able to rely upon a steady source of income. When clients avoid you, they turn elsewhere for financial services and take their money with them. As a result, your firm may experience a loss in revenue and other negative financial outcomes.
Emotional Challenges
It’s worth acknowledging that customer complaints can be deeply personal for the advisors who receive them. It’s natural to feel as if you have let your clients down or that you failed as a professional. For those who know that the customer complaints are baseless or inaccurate, feelings of frustration are understandable—especially if you feel powerless to set the record straight and fight back against these allegations. As you move through this challenging time, it’s worth seeking out systems of support to help you cope with your emotions and prepare to find productive ways of dealing with this frustrating situation.
Filing a FINRA Expungement Request
As overwhelmed and powerless as you may feel in the wake of receiving an unfair customer complaint, it’s essential to recognize that you have options. With a highly experienced securities law attorney by your side, you can determine whether your best option is to file a FINRA expungement request to have the customer dispute information removed from your BrokerCheck profile and the CRD. If the panel of three specialized arbitrators unanimously awards expungement relief, you will need to have the award confirmed by the court and send this confirmation to FINRA. Once it receives the confirmation of the expungement, FINRA will have the information removed from BrokerCheck and the CRD. To learn more about how to have customer complaints removed, reach out to a caring and trusted FINRA expungement lawyer to get started.
If you are struggling with an unfair disclosure on BrokerCheck that is adversely affecting your professional reputation, reach out to Judex Law LLC to share your concerns. Together, we will assess your options for having the disclosure removed or reducing its effect on your livelihood. Give us a call today at (303) 523-4022 to get started with a highly experienced and friendly securities law attorney.