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Terminations

When a brokerage firm terminates a financial advisor under suspicion of committing an investment-related sales practice violation, the terminating brokerage firm must disclose the circumstances surrounding the termination on the financial advisor’s Central Registration Depository (“CRD”) record.  The termination disclosure then often becomes publicly available through FINRA’s BrokerCheck system.

Terminations and the CRD record disclosures that result from them, can raise a host of issues.  Preliminary, a termination disclosure on the CRD record of a financial advisor can deter future employers from hiring him or her.  Second, termination disclosures are subjective in that the terminating firm exclusively determines what to say on the CRD record of the offending financial advisor. Accordingly, the terminating brokerage firm, depending on the termination disclosure it makes, can make or break the career of a financial advisor.  The power and influence a terminating brokerage firm wields over a financial advisor is unlike any other industry.

With the deck stacked against them, it is vital for financial advisors to seek the correct advice as to how to protect their interests in the event they are terminated.