In a recent survey of financial services professionals, many financial advisers said that they knowingly skirted their companies’ compliance regulations and are tired of complying with a regulatory framework that seems to be growing more complicated.
100 financial services professionals were surveyed by Shorewood, Minnesota-based consulting and training firm for the financial services industry Vestment Advisors Inc. 71 of the respondents were registered representatives.
One survey participant said that everyone violates compliance rules on a daily basis because it was not possible to work in the securities industry without regularly violating an SEC or NASD rule Another participant said that it was unlikely that anyone had “never violated a compliance rule,” seeing that hundreds of rules existed.
Other participants provided examples of these violations, including “selling away” clients’ loans, unauthorized trading, forging signatures, not processing checks upon receipt, and not sending correspondence to clients through compliance officers first for review.
While 13% of registered representatives said they spent a full day every week taking care of paperwork and compliance issues, 21% of the 71 registered representatives surveyed said that they spent less than one hour a week on these kinds of matters.
Some advisers admitted to not having the time to complete the adviser training, even asking others who worked for them to take the exams instead. Many of them also expressed frustration that when they have made attempts to take action that was legally within compliance regulations, their attempt were rejected by their firms. Nearly half of the advisers surveyed worried that a client would file a complaint or lawsuit against them.
Katherine Vessenes, Vestment Advisors President, blamed lack of proper training by compliance offers as a reason for these kinds of misconduct.
If you are an investor who has lost money because of the misconduct of a financial adviser and you would like to file a claim to recover your loss, it is advisable that you speak with an investment fraud attorney who can represent you. Statistics show that you increase your chances of recovery by retaining the services of a lawyer who can make your claim for you while protecting your interests.
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Advisers often skirt compliance rules, survey finds, Investmentnews.com, May 29, 2007
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