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Jun 24, 2005 2:43 am

As you can tell from the following i'm a newbie in this business:

I was reprimanded by my firm when I first started for failing to give a prospectus at the time of sale.   The trades were also cancelled.

I mistakenly thought that because my clearing firm automatically sends a prospectus a few days after a mutual fund trade to the client we didn't have to provide one beforehand.  

Live and learn!

Jun 24, 2005 2:49 am

who do you work for

Jun 24, 2005 3:52 am

I'd prefer to keep my firm anonymous but I am involved with a bank program.

How would who I work for be relevant?

thanks for feedback

Jun 25, 2005 4:23 am

I was just curious b/c I’ve never heard of trades being cancelled b/c a prospectus wasn’t provided.  How did the client react?

Jun 25, 2005 9:07 am

My bank program uses some 3rd party provider that calls random clients after they open a new account and asks them questions like:

"Did the consultant explain there is no FDIC insurance"

"Did he provide a prospectus"

"Are you aware this is not a bank product"  etc etc.

These clients were elderly and this type of call can only scare them as far as I"m concerned.  

Long story short, when they told this 3rd party person I didn't explain all of the above to them (which I did) my compliance dept. called them and asked them if they wanted to cancel the trade which they agreed to.

Lesson learned by me!

Jun 25, 2005 1:44 pm

Get a one-page disclosure form that says:

These investments are not FDIC insured and may lose value.  You might sell for less than you bought for.......

I fully understand the risks involved.  I have read all the proper disclosures, including the prospectus, and wish to purchase the securities.

Get it compliance-approved (your BD probably already has one of these) and have the client initial next to the relevant parts and sign.  Then you can have the compliance flunky put that in his pipe and smoke it.

Jun 25, 2005 1:59 pm


No offense, but that program greatly diminishes your professionalism, in the eyes of the client. I'm not a senior citizen, but having that 3rd party call me, checking up on you, would lead me to believe that you couldn't be trusted.

However, since you can't stop this program from continuing, you may want to incorporate it into your sales presentation. If the client believes the program is simply an extension of the sales process, they shouldn't think any more about it, if they get the call. For example, you might say that the bank, in order to maintain the best customer service, has hired a firm who might contact you to ask a few questions and see if you're satisfied with the product.

Or, even better, say that YOU have hired a firm to periodically contact all your clients, to ask some questions and check their satisfaction with the service you provide. (Afterall, YOU are the bank, aren't you?)

Just some ideas, but the point is the same. To maintain your professionalism in the eyes of the client, you should incorporate this bank program into your sales process.

Jun 25, 2005 2:03 pm

Good post, Dob.

Scrim, I agree.  The way your compliance handled that was crap.  They could have easily explained it as a customer satisfaction survey and worded the questions more positively so as to not scare your clients, but short of that, follow the big dog's advice...

Jun 25, 2005 7:10 pm

solid advice guys.

my mgr.also told me to incorporate into my sales process.

we are so strict compliance wise.

we already have the customer sign an acknowlegment that says NOT FDIC INSURED, MAY LOSE VALUE, NOT GUARANTEED, ETC ETC. and still because they didn't get a prospectus at time of sale but a few days later the customers were offered the option to cancel.

I guess you never can be too compliant

Jul 13, 2005 8:29 pm

well this issue was resolved.

my compliance department told me if you sell a mutual fund in a wrap program you do not have to provide a prospectus they are mailed out automatically.   since it's a "managed" program you do not have to give it at the time of sale.

if a mutual fund is sold outside the program you do have to give one at time of sale even though they also get mailed on a few days later.

now I have other issues i'm dealing with

Aug 4, 2005 12:52 am


The issue is not resolved.  These Nazi's that give you no training or no help are going to continue wacking your peepee until you become so frustrated you are going to quit and go to Hert RentaCars.  Look man, the rest of the world is not necessarily what you are experiencing.  These cats have that system because they hire newbees and don't teach them anything.  If you want to know something, just write me.  And please don't sell any LP's yet, Okay?

Luv U man

Aug 5, 2005 5:19 am


I'd prefer to keep my firm anonymous but I am involved with a bank program.


scrim, do you work for Bank of America or Wells Fargo?  The reason I ask is that I am in the middle of interviewing with both.  I can certainly understand your desire to keep your firm anonymous, so please pm me if you are working for one of these firms - the answer would certainly be an important factor in my decision.

Thanks in advance.

Sep 9, 2005 1:30 am

check out  this can be a great solution to any problems you run into with prospectus delivery and confirmation in the future.  you can email the prospectus to your client directly from the web site, and then you can track your history as a confirmation that you sent the prospectus to the client and that they actually received it.  it is all done and tracked for you through the system online.  you can also download the prospectus and print it or burn it to a cd for delivery to your client.  afterwhich you can print a pre-filled acknowledgement receipt for your client to sign acknowledging receipt of the prospectus.  and this too is contained in the history report function.