In two recent posts, I highlighted the problems with incomplete account opening documents and those signed in blank.  Now that you know the problem, the important question to ask is how do you prevent the problem in the first place.

A robust supervision program and a culture of compliance are a start, but not the complete picture.  It is how you conduct the supervision of your advisors that counts the most.

Any regular review of your brokers and financial advisors must include a random file (both electronic and hard copy)  review.  By doing so, you may be able to find those instances of incomplete account opening documents, or even the dreaded documents signed in blank.

A few years ago, I defended a broker where the claimant alleged that he signed the account opening documents in blank.  To test this claim, we performed such a random file review and found quite a few account opening documents signed in blank for multiple clients.  We uncovered a bad broker, and he was terminated.

Maybe this bad broker would have done something else if there had been a more fulsome annual review process.  But the fact remains the same; regular supervision with a random file review is one way to avoid claims focused on deficiencies with account opening documents.  


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