The Form CRS requires an explanation of the following: • whether the financial professional is registered as an advisor, broker, or both (known as a “dual-registrant”); • the different services offered by the firm (e.g., advisory or brokerage) and what it includes or does not include (e.g., no monitoring); • fees and costs associated with each service type; • the conflicts of interest that may arise; and • disciplinary history. The paperwork allows financial profes- sionals to deviate from the default rules and take on additional duties, or limit them. For example, notwithstanding the default rules, a broker may voluntarily take on monitoring, while an advisor may attempt to disclaim responsibility for monitoring in the paperwork. Most investment account documents include information concerning disputes, including mandatory binding arbitration. Brokers most often designate FINRA, which has special rules for customer disputes against their brokers. Advisors often select a different forum such as the American Arbitration Association, although FINRA has amended its proce- dures to entertain advisor disputes in some instances. Liability limitations are also common. For example, the contract may purport to cap the investor to the compensation charged. Such provisions have had mixed results in court and arbitration. They
significant differences remain. Moreover, attorneys should carefully consider account paperwork that defines the parties’ rela- tionship and that may override default rules in ways that neither the attorney nor the investor may have expected. Anthony F. Fata is a partner in Cafferty Clobes Meriwether & Sprengel LLP, where he represents financial professionals, investors, and traders in matters arising in the financial markets. He is also an adjunct professor at Seton Hall University School of Law. Delaney Slater is a second-year law student at the George Washington University Law School.
should be studied carefully. Investors (or their attorneys) need to have candid conversations with advisors or brokers about what is included in the relationship. Because the written word typically controls, the account opening paperwork should be carefully reviewed to ensure that it matches what was said verbally. Cautions Attorneys acting for their own personal accounts or on behalf of clients should be aware of the differences among financial professionals. Notwithstanding efforts to harmonize the standards of care and duties applicable to brokers and advisors,
Members Needed for Judicial Evaluation Committee
The CBA Judicial Evaluation Committee is looking for members to serve in its Investigation Division. The Committee evaluates candidates for the bench and sitting judges seeking retention. CBA members with a few years of practice experience are encouraged to apply. The JEC needs your help! This is one of our busiest years in a long time. You will learn a great deal about the legal profession while assisting in the JEC’s mission to improve the Cook County judiciary. If you are a current JECmember there is no need to reapply. Applications are available for download at www.chicagobar. org (under programs tab). Save the document to your personal computer, fill out the necessary fields, print and sign. Applications should be returned to Therese Kurth via fax 312-554-2054 or email@example.com on or before February 5, 2021. Due to the pandemic, New Investigator Training will be held virtually utilizing the Zoom platform.