A large percentage of financial advisors whole-heartedly believe that a disclosure on their BrokerCheck has not affected their business. Typically, that belief is based upon the fact that nobody has told them that they went elsewhere because the account-winning rep had no disclosures.
Consider the common scenario:
A friend of mine told me about a local restaurant that he insisted was a perfect date spot for my wife and I. In an attempt to make up for the long hours I work, I booked reservations for two, a couple of weeks out. It was my intention that the date be a surprise. As usual, I tipped my hand and gave up the name of the restaurant to my wife a few days later.
Within a matter of two days, my wife had done some due diligence about the restaurant online (only because she was excited for the upcoming date). Although most of the things she found online were favorable, she came across a few negative reviews that she felt were legitimate. That is all it took to persuade me to cancel the reservation and find a different venue.
The reason I am sharing this story is to highlight the reality that people make decisions which are triggered by what they find online.
Currently, about 85% of FINRA licensed professionals have no disclosures on their BrokerCheck profile. Of the remaining 15%, roughly half (7%) only have a single disclosure. Below is a side-by-side of the top left of a BrokerCheck profile for an rep with one or more disclosures (left), and the same for a rep with zero CRD disclosures.
The high-contrast orange box (instead of the docile light blue box) contains an icon with an exclamation point. Clearly “orange” is associated with the use of caution or encourages one to slow down (e.g., traffic lights). In combination with the exclamation point, it is clear that FINRA is attempting to caution investors whom are researching potential FA’s with whom to invest.
For those who have one or more investor complaint disclosures or U5 terminations on your BrokerCheck profile, you have a pretty simple decision to make. Your first option is to continue ignoring the impact it has had, and will likely continue to have on your business. Thankfully, you will be able to ignore it until a potential client lost is kind enough to tell you that they went elsewhere because the other advisor did not have a BrokerCheck disclosure. Your second option is to speak with someone that has experience obtaining FINRA expungement awards which facilitate the removal of disclosures. If that person can show you examples of FINRA Rule 2080 expungement awards he or she has won recently that are similar to your situation, you will have found an avenue to eliminate any additional harm to yourself or your career.
President and Founder
This blog is our ongoing effort to inform and educate FINRA licensed professionals about the evolving regulatory ecosystem in which we operate.