Joe Saul-Sehy is a recovering Financial Planner. Currently, he is the co-host of the 2 Guys and Your Money podcast, COO & chief bottle washer at TheFreeFinancialAdvisor.com, and was the Channel 7 WXYZ-TV “Money Man” in a previous life.
He joins us today to talk about Financial Advisors and Compliance.
Compliance makes sure Advisors:
- Aren’t doing something illegal
- Not doing something immoral
- Not embarrassing the firm on the letterhead
- Following rules governed by FINRA
- Retaining a record of all phone calls and emails
- Making copies of all emails
- Filing a paper copy of any advice given to clients
So many rules on the books
Officer of Supervisory Jurisdiction (OSJ) is like the Sheriff. They perform periodic audits. The reason most Financial Advisors aren’t fond of OSJs is because there are so many rules to follow that there wouldn’t be enough time to serve even a handful of clients. Average Joe likens it to a Police Officer: There are so many rules on the books that they can find something wrong with your car.
This is both good and bad
While this creates a ton of extra work for Financial Advisors, it protect the clients from having a Bernie Maddoff experience. It also protects Advisors from misunderstandings from disgruntled clients. However, it also could protect the investment firm from prosecution, not necessarily the advisor.
Also mentioned in this episode:
Meet Average Joe:
Follow Joe on Twitter @AverageJoeMoney