Posted on Nov 20th, 2015
James D. (“Jim”) Belenis of KMS Financial in Davis, California went off the reservation and ended up in a gold mine.
Mr. Belenis broke FINRA rules. The Financial Industry Regulatory Authority (FINRA) requires that financial advisors disclose to their brokerage firms any outside business activities, so that brokerage firms can properly monitor their employees.
All brokerage firms have systems in place to supervise their financial advisors. Customers might be aware of this when they hear a message stating that their phone call with their financial advisor is being recorded, but proper supervision goes much deeper, and includes review of whether recommended traded are suitable for customers in light of their investment objectives and risk tolerance. Of course, this supervisory system does not protect investors when financial advisors operate outside the system.
Posted on Oct 4th, 2016
If you’re reading this article, there is a good chance you invested in or through an entity that is now in receivership, and you probably have a lot of questions! The purpose of this article is to give you a general overview of how receiverships work so you know what to expect. Every receivership is different, but every receivership goes through four overlapping stages: 1) stabilization; 2) investigation; 3) litigation; and 4) distribution.
These four stages all support the overarching goal of every receivership—the orderly winding down of a business in a manner that maximizes value for investors.
We will come back to these four stages in a minute, but first it is important to understand the background context that gives rise to a receivership.
Posted on Jun 23rd, 2015
Financial advisors love to sell variable annuities. The reason is simple—commissions of up to 8%. If a financial advisor can sell you a $200,000 variable annuity, that means commissions of up to $16,000. Not bad for a day’s work!
Unfortunately, commissions are just about the only thing that is simple about variable annuities.
The one reason why variable annuities are almost always a bad idea is that they are too complicated for ordinary investors (and normal people in general) to understand. Seriously, have you ever tried to read a variable annuity policy? Here is just one example from an actual policy. Try to stay awake through this, because there is a lot more you urgently need to know about variable annuities: