Never, under any circumstances, should you have your client sign an account opening document in blank, for you to complete at some later time.  To most of you, this is not much of a secret, but I have seen it enough in my practice of defending brokers to know that it happens all too often.

So what is the problem with taking this shortcut?  After all you are just going to use your notes to fill in the gaps.  What gives?

For one, having account forms signed in blank is worse than submitting incomplete forms.  By controlling the ultimate content, you expose yourself to a claim that you exercised control over all of the customer’s accounts.  The greater control that you have, the greater your duties become to that client.

Having your client sign forms in blank also opens you up to fraud claims.  What do you say when the client alleges that his account was miscoded as aggressive, when he was a conservative investor where you completed the forms without client participation.  In short, there is not much to say other than to ask for a settlement demand.

If the circumstances dictate that you need to complete an account document at a later date, then do so, but without the client pre-signing the blank form.  This way, you can send the completed form to the client with a covering letter/email explaining what you did and then have the client sign off on how you completed the form.  By doing so, you can avoid the fraud claim associated with a form signed in blank.

Not having clients sign forms in blank is not a “best practice”.  Rather, it is the only way that you should complete account forms.

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