DEFENDING YOUR PROFESSIONAL INTEGRITY
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Many brokers assume that customer disputes are inversely correlated with the performance of the overall market. Which lends itself to the idea that, in a strong market cycle, customers make fewer complaints. Although Customer Disputes ramp up significantly when the broad market goes through periods of decline; we are seeing an increase in Customer Disputes despite the broader market’s performance over the most recent seven and a half years.
Despite the strength of the overall market, and the 58-percent gain in the Dow Jones since 2011, there were almost 10-percent more investor complaints received and reported by FINRA in the last year than any year in the preceding five years. A strong market can no longer be expected to protect you against clients’ customer disputes or investor complaints received by FINRA.
Some attribute the steady increase in investor complaints and customer disputes to the several millions of dollars in advertising FINRA has spent to inform the investing public of BrokerCheck. Others insist that the trend will continue to increase, regardless of the broader market’s performance, simply because the increasing availability of information in America’s smartphone society.
Whether you can put your finger on it or not, the existence of one or more customer dispute disclosures on a your BrokerCheck profile has been the reason why a potential new client has not ended up becoming your client. The degree to which the negativity of a disclosure impacts your business will only increase as more investors become aware of BrokerCheck and traffic on the site continues to grow year-over-year. Last year alone, FINRA reported 71 million investors used the site.
AdvisorLaw has a dedicated team of attorneys and staff that exclusively represent brokers marred by disclosures viable for expungement from the CRD system. Contact me today if you or a colleague has disclosures on BrokerCheck that may qualify for expungement.
See our commentary in InvestmentNews here.
President, Managing Attorney
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This blog is my ongoing effort to inform and educate FINRA licensed professionals about the evolving regulatory ecosystem in which we operate.