Oct. 11, 2022
As an advisor, the deck is already stacked against us and FINRA already behaves biased against advisors. We are unfairly experiencing guilty-by-previous-generations-actions. Many consumers file complaints against advisors for a variety of reasons including: 1. Consumer's lack of personal responsibility in decision making, asking questions, ensuring they understand what they are buying, etc. 2. Consumers want to simply change their mind and get out of a contract outside of contractual terms. 3. Consumers act in a litigious manner that they can sue or complain to get what they want and will win because their word means more than the trusted, industry professional. Period. Yes, we as advisors bear the burden of responsibility to know our customer and educate them so they can make the best decisions. We document our interactions with customers for this reason, but we can only do so much. If a customer complaint is truly meritless, then the advisor should not continue to be potentially harmed by having there meritless disclosures continue to be on record. In recent years FINRA has pushed for optimal disclosure, requiring us to include on our websites the ability of consumers to do a Broker Check for disclosures. I am not against this disclosure requirement as investors should know who they work with, but the record should reflect the honest history of the advisor (and by reflection the true character of the advisor). If FINRA makes it even more difficult than it already is to have meritless complaints expunged, then not only will Broker Check be inaccurate but it further enables consumers and FINRA to have the upper hand and further stack the deck against us. We are nearly powerless already to fight bad faith consumers. Additionally, to even make the fight against complaints is financially difficult and time consuming that negatively affects our business and viability while to process plays out over months/years. Taking away the only option advisors have to stand against invalid complaints and even broker dealers that throw the advisor under the bus to save their own hides is infuriating. There is NO evidence to support that the current expungement process is faulty or being unfairly decided. Requiring a three arbitrator panel and a unanimous decision similar to a judicial criminal case, with arbitrators appointed from a select group of arbitrators rather than a wider group is akin to our legal system doing away with a 12 member jury and criminals being guilty until proven innocent. These proposed FINRA regulations are not in alignment with this country's basic legal system of innocent until proven guilty. These proposed changes are being created to solve a problem that doesn't exist. If FINRA wants to propose meaningful changes here are two: Disclosures that were DROPPED BY CLIENTS should be DROPPED by FINRA no later than 3 years after filing. Allow Editing of U4 listings that correctly describe the issue and resolution that doesn’t always immediately give the negative connotation that the advisor is a cheat/liar if it’s not accurate. There should be an expungement process for those convictions that occurred greater than 15 years. With the current volatile markets, clients will voice hundreds of complaints because the markets have begun to again act like historical markets, but they forgot what that looks/feels like. Those complaints need to have a valid way to be removed from the advisor's record when/if the complaints proves to be invalid. To not have a way to correct these disclosures adds to more "McDonald's Hot Coffee in the Lap' customers that create unjustified problems. Respectfully, John O’Bannon CPFATM Financial Advisor* Diversified Financial Group