Recently, a significant incident caught my attention. Michael Breard (CRD #: 4501865), a broker registered with Cetera Advisor Networks, found himself entangled in an investor dispute. This information is available in his BrokerCheck record. As a seasoned financial analyst, I thought it would be worth dissecting this case to shed some light on the seriousness of such allegations, what this means for investors, and offer an opportunity for education.
Investor Allegations
The crux of the dispute unfolded on February 8, 2024, where an investor expressed dissatisfaction with Michael Breard. According to the complaint, Breard suggested investments that completely disregarded the investor’s individual objectives and risk tolerance.
Let’s put this into perspective for a moment. We must understand an important financial fact: An average investor relies on their financial advisors when making investment decisions, with 97% of those surveyed relying on advisors for more than just investment recommendations. A betrayal of trust in such a scenario is not just a disappointment- it throws the investor’s whole financial strategy off course.
Understanding the Violation
To make sense of this, it’s essential to understand the basics. The Financial Industry Regulatory Authority (FINRA)’s Rule 2111 orders brokers to consider whether an investment aligns with their investor’s financial aspirations. This case allegedly shows some common violations of this rule, which include:
– Excessive trading, also known as “churning,” which infringes on the necessity for quantitative suitability.
– Suggestions of inappropriate investment strategies, such as over-concentration in specific stock or sector that potentially increases risk.
– Recommendations of high-risk or illiquid investments that can cause high fees for the investors.
Financial Advisor’s Background
Michael Breard is no novice in the finance sector; he has passed several examinations, such as the Series 66 Uniform Combined State Law Examination, SIE – Securities Industry Essentials Examination, and the Series 7 General Securities Representative Examination. Breard currently maintains registration as a broker in 25 states and as an investment adviser in Louisiana and Texas.
Consequences and Lessons Learned
These allegations hold severe implications for the accused, where he might face penalties or even suspension. The situation also serves as a warning bell for investors. As Warren Buffet wisely said, “It’s good to learn from your mistakes. It’s better to learn from other people’s mistakes.”
I cannot emphasize this enough: always cross-verify any advice given by your advisors. And for my fellow brokers and advisers, let’s take this as a reminder that our main role is to serve our clients’ best interests, keeping their financial goals and risk tolerance in mind. We are the gatekeepers of investor’s trust, and we must do our part to uphold it.
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