Form U4 Basics: Part 6 – Disclosure Issues Beyond the Form U4

Most stockbrokers and financial advisors know that they have certain disclosure obligations and must answer questions to disclose certain events on their registration forms such as the Form U4 for registered representatives and the Form ADV for registered investment advisors. Often these forms get reviewed once a year at renewal times, or when there is a triggering event such as a disciplinary action. It is important to keep these forms current so as to avoid enforcement action for failing to disclose material information.

Some brokers and advisers might not remember or be aware of disclosure obligations beyond the U4 and ADV. If you are an insurance agent, you might have disclosure obligations. And if you have a professional designation, you might have more disclosure obligations as well. For example, in Georgia, an insurance agent has to notify the Commissioner of any change to the information included in his or her application, and must do so within 30 days. Also, CFP (R) certificants must report to the Board of any professional suspension or bar within 10 calendar days upon receipt of notification of such action. There are also requirements to report certain criminal convictions as well.

The point is this: Don’t just think about the U4 and ADV when considering your disclosure obligations. Review your other licenses, including insurance, as well as the requirements for any professional designations that you hold. Failing to do so could result in unintended consequences.

Attorney Joel Beck helps stockbrokers and financial advisers protect their #1 investment: their careers. If you’re a broker or advisor who needs help, contact Joel at 678-344-5342 or visit him online at www.thebeckfirm.com.