In one of my earlier podcasts, I discussed the one customer compliant I had on my permanent record. Back in early 2008, I inherited a client from a previous advisor who had left the bank. This client had purchased bonds in the past and when one of his bonds came due, he wanted another bond. I gave him a few options and he choose a Bear Stearns bond. Nobody knew then that later in the year Bear Stearns would end up in default. However, when this clients 19k in Bear Stearns began to drop in value I suggested that he get out of the position, but he chose to keep it. He rode it all the way down until it had no more value. He then filed a complaint saying that I had guaranteed him his money back if the Bear Stearns ever went bankrupt. That was an obvious lie. Rule number one as an advisor is to never use the word ‘guarantee’. Rather than fighting the complaint by going to arbitration my employer, First Citizens Investor Service, paid the client his money back. They chose to side with the client over their own employee. At the time I spoke with an attorney who told me that the complaint should have been thrown out and the only reason the bank would cave in is because their insurance policy covered it. It wasn’t worth their time or resources even though they knew very well that it would be on my permanent record.
Fast forward to May of 2020. I received a letter in the mail from First Citizens Wealth Management. Upon opening the letter, I found that First Citizens Wealth Management had just updated my permanent record to reflect a new customer complaint. Let me preface this by saying that I have not worked for First Citizens Investor Services/Wealth Management for ten years and have not spoken to anyone there for ten years. The complaint was from a client I had met with back in 2008, a retired doctor from Florida who owned many annuities. This client was a referral from the Private Banking Group of the bank, so a Private Banker was always involved in those client meetings. The client bought an annuity and signed all the disclosures. The disclosures outline all the risks of the policy as well as the benefits it offers.
However, ten years after purchasing the annuity, in 2018, he filed a complaint against First Citizens and the Insurance Company saying he was misled on the annuity’s income rider. Notice I didn’t say the complaint came in against me. First Citizens Wealth Management ended up settling with this doctor in January of 2020. Again, the bank’s insurance policy paid the settlement and they diverted the blame to my record because it was convenient for them.
I’ve spoken with two attorneys and two high level compliance officers at other firms to get a handle on how my record can be affected by this.
The facts are:
1) I never met with this client by myself, always had a witness and all the required disclosures were signed.
2) I was never named in the complaint. One of the lawyers I spoke with said this is common practice among firms. The firm will be initially named in the compliant, but they will move it off their record by placing blame on the original advisor on the contract. Thus, the complaint hit my record.
3) The first I learned of this complaint was from the letter I got in May of 2020, once the complaint was settled. I was never contacted to be interviewed. I never received a copy of the original complaint.
4) The lawyers and the compliance officers all said this type of complaint should have never been settled. They all agreed that most firms would have never entertained settling this sort of complaint.
5) I could potentially get this complaint off of my record, however it would cost me anywhere from $15k to $50k with no guarantee.
Twenty-Seven years ago when I entered into the financial advising world I was warned that 99% of the public were good people but there was 1% that would cause problems or try to get something for free. My hope was that I’d be with a firm that would “have my back” and support me as an advisor. First Citizens Wealth Management is not one of those firms. On the flip side, First Citizens Bank is a wonderful organization that looks after its employees and does a great job taking care of its clients. The Wealth side could learn from the bank side when it comes to how it takes care of its employees.
The letter I received in early May of this year reminded me why I never want a large corporation in control of my future. I gave them 14 ½ years of my life, made the bank millions of dollars and always tried to do the right thing for my clients. At the very least I should have gotten a phone call asking my side of the story. But things like this don’t matter to large corporations, the machine keeps moving and we as employees or ex-employees get flushed down the drain. It’s a shame really, but it is what it is.
There is a saying “Fool me once, shame on you. Fool me twice, shame on me.” I will not let corporate America fool me a third time.
Live free my friends,
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Investment Advisory Services offered through Shankland Financial Advisors, LLC, Registered Investment Advisor