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Guarding against allegations of theft or fraud

On Behalf of | Jun 7, 2023 | Criminal Defense |

As a financial advisor, it’s your job to help clients manage their money and make educated decisions about their investment portfolios. Typically, you will work with a custodian such as an Iowa bank or credit union to ensure that client funds are secure. However, there are additional steps that can be taken to minimize the risk that you are accused of theft or other types of fraud.

Communicate regularly

You should send out account statements on a monthly or quarterly basis. Furthermore, you should be ready to help clients view their portfolio anytime through an online portal or by scheduling a meeting at your office. Doing so provides you with an opportunity to explain why you made a trade, decided not to take a trade or took other actions on behalf of a client. Adding this context may reduce the risk that a client believes that you have engaged in any type of financial wrongdoing. You can also make financial or other types of disclosures on your website or at any time while recruiting or working with clients.

Feel free to cede control

If a client doesn’t feel that you’re making decisions that are in that person’s best interest, you can choose to work on a nondiscretionary basis. This means that you don’t have the ability to make trades, transfer funds out of a client’s bank account or take other actions that might impact the person who hired you. Instead, you will simply provide advice that a client can choose to act on or not.

If you have been accused of financial impropriety, it’s important to take action quickly. Gathering bank statements or other records may help you defend yourself against the accusation and minimize the risk of paying a fine or losing a professional license.



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