DEFENDING YOUR PROFESSIONAL INTEGRITY
Stay current on recent changes in the regulatory environment
Many financial advisors have a budget in place set aside for “marketing”.
Typically, this could include local advertisements, referral marketing groups, or entertaining priority prospects. An advisor may use their own money, or depending on their employment structure, an internal business development account (BDA) or travel and entertainment (T&E) account. Either way, these funds are available to extend the reach of the financial advisor’s business and grow their clientele.
Up until June of last year, brokers and advisors could be fairly confident that, if used appropriately, whatever money they dedicated to marketing would help grow their business. However, once FINRA instituted the rule that every FA’s online profile must link directly to BrokerCheck, “marketing dollars” takes on a new perspective for advisor’s that may have a negative mark(s).
BrokerCheck has gone from a site that hardly anyone in the industry (or the general public for that matter) knew about to the keystone of FINRA’s campaign for transparency and vetting a financial advisor.
FINRA’s most recent infographic shows the sharp uptick in BrokerCheck traffic:
From these numbers, you can quickly ascertain that the glory days of potential clients being unaware to an advisor’s track history are behind us.
For financial advisors with a clean record, this information can be leveraged to demonstrate trust in their unblemished career. Additionally, they also get the second-hand advertising benefit of FINRA spending millions of dollars to tout their spotless record as an advisor.
However, for those brokers that have meritless customer disputes, defamatory terminations, or even paid tax liens, these can be disclosures that ruin the trust of a prospective client. And you can be sure that the proliferation of this data will only continue to push clients away rather than steer them to an advisor’s practice. This regulatory site creates a Catch-22 where every incremental dollar that an advisor spends on marketing can actually be compounding the effect of these negative disclosures.
This is the time for advisors with negative marks to get the most out of their marketing budget and clean up meritless customer complaints or defamatory U5’s. Get the slate wiped clean so that future dollars allocated to building your brand actually work for you and not against you.
EA, Executive Vice President
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Broomfield, CO 80020
This blog is my ongoing effort to inform and educate FINRA licensed professionals about the evolving regulatory ecosystem in which we operate.