More On Legal & Compliancefrom The Advisor's Professional Library
- Trading Practices and Errors When SEC-registered investment advisors conduct annual audits of firm policies and procedures, they should pay close attention to trading practices. Though usually not required to, state-registered advisors should look at their trading practices and revise policies that do not fully protect clients.
- Updating Form ADV and Form U4 When it comes to disclosure on Form ADV, RIAs should assume information would be material to investors. When in doubt, RIAs should disclose information rather than arguing later with securities regulators that it was not material.
Troubled independent broker-dealer Securities America announced Thursday that a new group of advisors from North Dakota had just joined Diversified Wealth Management LLC, which offered securities through Securities America.
Diversified Wealth Management, based in St. Louis Park, Minn., offers fee-based financial advisory services to individuals and small business owners. Its addition of six Bismarck, N.D., advisors led by AXA Advisors retirement planning specialist Matt Puetz will expand Diversified Wealth Management to 20 advisors, eight staff people and seven locations in two states.
“Having the Bismarck advisors as part of Diversified Wealth Management will add an additional layer of experience and expertise,” Diversified Wealth Managing Partner and OSJ Todd Terhorst said in a statement released by Securities America. “The advisors in this group have an incredible depth of knowledge. Most of the advisors have been in the industry for more than 20 years and have honed their skills and areas of specialty. I have been impressed with their level of professionalism and their primary focus to do whatever is in the best interests of their clients.”
Terhorst said he anticipates the Bismarck addition to increase Diversified Wealth’s assets under management to nearly 33%.
After hearing oral arguments on March 18 in Dallas, U.S. District JudgeRoyal Furgeson rejected a class action settlement under which Securities America, headquartered in La Vista, Neb., would have paid $21 million to settle charges that it didn’t conduct the proper due diligence on investments sold by Securities America reps from Provident Royalties LLC andMedical Capital Holdings Inc.
Both companies were charged with fraud by the SEC, and plaintiffs in the case allege they had lost $400 million. Since news of the case broke, Securities America parent Ameriprise has announced that it will sell the company, and a number of advisors have allegedly left or made plans to leave the firm. In late May, Securities America agreed to a $2.8 million settlement over the Medical Capital case in Massachusetts.
The six former AXA advisors – Matt Puetz, Farrell Carlson, Douglas Buehler, Robert Johnson, Gary Berube and Larry Souther – officially began business with Securities America and Diversified Wealth Management on May 6.
The transitioning advisors have been together since 1988 and have more than 100 combined years of service, according to the Securities America release. The Bismarck advisors provide services to more than 1,000 clients with more than $200 million in total assets. Puetz, leading partner of the transitioning Bismarck advisors, said the group chose to join Diversified Wealth Management and Securities America to gain more independence.
“We have always taken the team approach to servicing client’s needs, so we fit in nicely with Diversified Wealth Management’s model,” Puetz said in the Securities America release. “We are excited about joining forces with both Diversified Wealth Management and Securities America to finally have the independence to allow us to provide unbiased advice and additional services and products to our clients.”
Read “Securities America Agrees to Settlement in Massachusetts” at AdvisorOne.com.