Ed Cofrancesco is a man that believes in second chances.
Cofrancesco started in the industry when he was 16 years old and still in high school. He is now president and CEO of International Assets Advisory.
International Assets Advisory is an independent broker-dealer and RIA that has been serving financial advisors and institutions since 1982. The current owners, including Cofrancesco, acquired the firm nearly 12 years ago. The firm has an international focus, which includes investing internationally for U.S. investors as well as investing in the U.S. for non-U.S. investors.
“I’m a stupid street kid from Brooklyn. I didn’t finish college … [and now] I have more money than I ever thought I was going to have in my life,” he told ThinkAdvisor.
The way Cofrancesco sees it, his whole career has shaped who he is.
“One of the things I believe in is giving people second chances,” he said.
By this, he means he’s not afraid to bring into the firm advisors or brokers that might have regulatory or disciplinary actions on their record.
“We have hired our fair share of advisors who have had issues,” he said.
International Assets Advisory, which is a midsize firm, has about 160 advisors. Of that, Cofrancesco says 35% to 40% might have something on their record.
“Some of them maintain 100% of their innocence to this day, and based on circumstances I’ve seen in some cases I had every reason to believe that they were telling the truth and believe in that now,” Cofrancesco explained. “Others were small technicalities that got blown into big issues with their firm. Others may have done something wrong at the time and didn’t realize they were doing something wrong.”
Then there are the others that have flat-out lied and made it sound like they were innocent when they were not, Cofrancesco said.
“We’re really good at sorting that out through our review process when we hire them,” Cofrancesco added. “And even then, I’d say maybe one out of 10 slips through, but within a year or so we can determine [they lied] — and bye-bye.”
A 2017 study by Reuters with the assistance of Columbia University Law School identified nearly 48% of the 140 total brokers at the time at International Assets Advisory as having flags from the Financial Industry Regulatory Authority.
The FINRA flags that the study examined included regulatory sanctions, customer complaints that resulted in a payment, criminal cases that resulted in a plea agreement or conviction, and bankruptcies.
“We’ve gotten some bad press over the years,” Cofrancesco admitted. “If you look at raw numbers versus other firms, we’re always in the top 20 in terms of firms percentage-wise that have people with marks on their license. But then you have to look at the marks my advisors have. It’s a quantitative analysis but not a qualitative analysis.”
While the firm may rank high in regards to brokers with a regulatory history, Cofrancesco is quick to point out the firm has had a low number of FINRA actions in its 36-year history — and zero in the time that Cofrancesco has been in charge.