As a former financial advisor and legal expert with over a decade of experience in both sectors, I’ve seen my fair share of investor complaints and the devastating impact they can have on individuals and families. The recent allegation against Mark Roberts, a financial advisor based in Overland Park, Kansas, is a serious matter that deserves close attention from investors and industry professionals alike.
According to the complaint filed in September 2024, Mr. Roberts, while representing CreativeOne Securities and doing business as Affinity Asset Management, sold an unsuitable investment strategy involving indexed universal life insurance. The pending complaint alleges a staggering $650,000 in damages. While Mr. Roberts states that he is “aggressively defending this dispute,” the severity of the allegation cannot be understated.
As an investor, it’s crucial to understand the potential risks associated with any investment strategy and to work with a financial advisor who prioritizes your best interests. In this case, the allegation suggests that the recommended strategy may not have been suitable for the investor’s unique circumstances and risk tolerance.
The Financial Advisor’s Background and Past Complaints
A closer look at Mr. Roberts’ background reveals that this is not the first investor complaint he has faced. His BrokerCheck report discloses two additional complaints:
- In 2007, a complaint alleged that he delayed the liquidation of a customer’s account while representing Thrivent Investment Management. The complaint settled for $4,733.36 in 2008.
- In 2008, Thrivent Investment Management terminated Mr. Roberts in connection with allegations of false representations, discretionary trading, accepting trade authorizations via email, and violating other firm policies and procedures.
These past incidents underscore the importance of thoroughly researching a financial advisor’s background before entrusting them with your hard-earned money. Investors can access an advisor’s BrokerCheck report through the Financial Industry Regulatory Authority (FINRA) website to review their history and any potential red flags.
Understanding FINRA Rules and the Allegation’s Implications
FINRA, the self-regulatory organization overseeing broker-dealers in the United States, has established rules to protect investors and maintain market integrity. One such rule, FINRA Rule 2111, requires brokers to have a reasonable basis to believe that a recommended transaction or investment strategy is suitable for the customer, based on the customer’s investment profile.
In simple terms, this means that financial advisors must take into account factors such as the investor’s age, financial situation, risk tolerance, and investment objectives when making recommendations. Failure to do so can result in unsuitable investments that expose investors to excessive risk or financial harm.
Consequences and Lessons Learned
The consequences of unsuitable investment advice can be severe, as evidenced by the $650,000 in alleged damages in the complaint against Mr. Roberts. For investors, the lessons learned from this case are clear:
- Conduct thorough research on your financial advisor, including reviewing their BrokerCheck report for any past complaints or disciplinary actions.
- Ensure that your advisor fully understands your financial situation, risk tolerance, and investment goals.
- Ask questions and seek clarification on any recommended investment strategies, particularly those involving complex products like indexed universal life insurance.
As the famous investor Warren Buffett once said, “Risk comes from not knowing what you’re doing.” By staying informed and working with a trustworthy financial advisor, investors can mitigate risk and work towards their financial goals with confidence.
It’s worth noting that, according to a study by the University of Chicago, approximately 7% of financial advisors have a history of misconduct. While the vast majority of advisors prioritize their clients’ best interests, it’s crucial for investors to remain vigilant and proactive in protecting their financial well-being.
As a former financial advisor and legal expert, my goal is to empower investors with the knowledge and tools they need to navigate the complex world of finance and law. By shedding light on cases like the complaint against Mark Roberts, I hope to encourage a more transparent and accountable financial services industry that truly serves the needs of investors.
