NEW YORK, July 14, 2016 (GLOBE NEWSWIRE) -- Every year Barron’s Magazine issues its list of the top 100 financial advisors in the United States.  According to Barron’s, a proprietary ranking system is used to rank advisors based on a number of factors, which include production revenue and an evaluation of each advisor’s regulatory record.  Fitapelli Kurta reviewed Barron’s 2016 ranking and learned that an alarmingly high number of the advisors on the list have some regulatory disclosures, which include suspensions by securities regulators, customer complaints, a termination and millions in settlements and arbitration awards. The information for this press release was gathered by looking up each financial advisor’s BrokerCheck report, which is made publically available by the Financial Industry Regulatory Authority, or FINRA.

In total, Fitapelli Kurta’s research shows that 50% of the financial advisors on the list have at least one disclosure and 25% have two or more.  In one extreme example, a Wells Fargo financial advisor made the list despite having seven disclosures, which include a suspension by the Securities and Exchange Commission, a fine from the New York Stock Exchange and several customer disputes resulting in awards and settlements in the seven figures.  There are two other financial advisors on the list with seven disclosures and one Merrill Lynch advisor who has eight disclosures, which is the most of anyone included.

Fitapelli Kurta’s review of the rankings also demonstrates that even Barron’s number one financial advisor, who received a perfect score of 100% has not one, but two disclosed customer complaints.   This “top” financial advisor is not alone.  In fact, according to Fitapelli Kurta partner, Marc Fitapelli, “The highest ranked financial advisors seem to also have the highest concentration of disclosures.  For example, eight of the top ten financial advisors have at least one disclosure and two of the top ten were censured by the National Association of Securities Dealers.”

The disclosures among the 100 best financial advisors in the country range from customer disputes to suspensions by securities regulators.  The best financial advisors in America even include an advisor who was fired by UBS for violating the firm’s policies and engaging in “unprofessional conduct,” according to the FINRA BrokerCheck reports that were  reviewed by our law firm.  It also includes financial advisors who settled millions of dollars of customer arbitrations and a financial advisor who was once under suspension by securities regulators. 

Paying attention to these disclosures matters.  One high profile example of why this ranking system is so flawed is Dawn Bennett.  Ms. Bennett was previously ranked as a top 100 advisor despite having a $450,000 settlement payment disclosed on her license.  This week Ms. Bennett was barred from the securities industry and ordered to pay $4 million in fines and disgorgements.  It gets worse.  According to a March 2, 2016 brief, the SEC alleged that Ms. Bennett made false submissions to Barron’s to be included in the rankings in “[an] attempt to boost a fledging advisory practice.” 

According to partner, Marc Fitapelli, “This list should include an asterisk next to any financial advisor who has disclosures so readers can look up the disclosure and determine, for themselves, if this is an individual who they want to entrust with their financial affairs.  I suspect if this practice was adopted many of the so called top financial advisors would remove their names from consideration.”

Fitapelli Kurta believe in addition to notifying its readers about disclosures, Barron’s should also automatically disqualify financial advisors with more serious issues.  It is hard to justify how a financial advisor who was suspended by a securities regulator or terminated for failing to follow firm policy should even be considered for inclusion on a list of the best financial advisors in America.  “They can do better than that and they should do better than that.  It is unfair both to the investing public and to the other fifty financial advisors on the list who have unblemished records,” argues Marc Fitapelli.  

Fitapelli Kurta is a New York city based law firm that focuses its practice on securities related arbitrations before the Financial Industry Regulatory Authority, or FINRA.  The information for this press release was gathered from publically available disclosures, which were made available through FINRA.  If you have any questions, please contact Marc Fitapelli at 212-658-1501.