Video: How can investors review the background of a stockbroker or investment adviser?

How can investors review the background of a stockbroker or investment adviser?

Also available at KansasCityLaw.tv and The Kueser Law Firm’s website.
In this video, Jason M. Kueser discusses how investors can research the background of stockbrokers, financial advisors, and Registered Investment Advisers (RIAs). Background information related to stockbrokers and financial advisors can be obtained using FINRA’s BrokerCheck tool. Background and other information related to Registered Investment Advisers (RIAs) can be found on the Investment Adviser Public Disclosure website. In addition to these sites, there are various third-party sites/services that provide information related to stockbrokers, financial advisors, and investment advisers.

This video is provided for informational purposes only and nothing contained herein is or should be constituted as legal advice. If you have questions related to any legal topic, you should consult with an attorney and should not rely solely upon information provided via the internet.
The choice of an attorney is an important one and should not be based solely upon advertisements such as this website. Past results afford no guarantee of future results. Every case is different and must be judged on its own merits. *Any information submitted via this website may not be secure and/or confidential. Merely contacting this firm does not establish an attorney-client relationship.

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FINRA Arbitration Statistics – December 2010

FINRA recently released its arbitration statistics for the month/year ended December 2010.

For the year, there were 20% fewer cases filed (5,680 v. 7,137 in 2009) and there were 6,241 cases closed (a 37% increase over 2009). Of these cases, 22% were resolved by arbitration hearing, 52% were resolved by direct settlement between the parties, 10% were resolved through mediation, and 16% of cases were either withdrawn or resolved through “other” method.

Results for investors also improved in 2010, as 47% cases that were decided by an arbitration panel resulted in an award of damages to the customer. This reflects a 2% increase over the results in 2009, and a 10% increase compared to arbitration claims decided by arbitration panels in 2007 — the worst year, for investors, in arbitration claims over the past six years.

The overall turnaround time for cases closed during the year also increased to 12.7 months (from 11.5 months in 2009). For cases that are resolved after an arbitration hearing, the turnaround time increased to 15 months (from 14 months in 2009).

The most common claims in arbitration were: (1) Breach of Fiduciary Duty; (2) Negligence; (3) Fraud/Misrepresentation; (4) Failure to Supervise; and, (5) Breach of Contract. The most common type of securities involved in arbitration claims were mutual funds and common stocks.

The Kueser Law Firm represents investors in securities arbitration. If you feel that your investments have been mismanaged, please contact the firm to discuss your rights.

FINRA Agrees that a Fiduciary Standard Makes Sense for Broker-Dealers

For the first time, FINRA has publicly stated that it “makes sense” that broker-dealers who provide investment advice should be held to the same fiduciary standard that applies to Registered Investment Advisers.

This is a significant development because broker-dealers and their representatives have relied upon an exemption in the Investment Advisers Act of 1940 to escape these duties. The Investment Advisers Act exempts “any broker or dealer whose performance of such services is solely incidental to the conduct of his business as a broker or dealer and who receives no special compensation therefor” from its coverage.

Broker-dealers consistently take the position that their compensation is “solely incidental” to their broker-dealer business. However, virtually every broker-dealer has shifted their business model from that of the traditional “stock broker” to that of an investment adviser. These firms now call their representatives “investment advisers,” “financial advisers,” “wealth managers,” and other titles that reflect that their representatives provide broad advisory and/or management services.

While FINRA does not feel that it is necessary to change its suitability rules, extending fiduciary duties to broker-dealers is a significant step to increasing the rights and protection afforded to investors.