Financial advisors are increasingly finding themselves on the wrong side of defamation claims — thanks to inaccurate information on their Form U5. This form, filed with regulators, details the reasons for any termination from a firm. Doc Kennedy, President and Founder of AdvisorLaw, dives into the challenges that advisors face and the proposed changes to the Form U5 process.
Form U5 Terminations: What To Expect & How To Protect Your Career
When a broker faces termination, it’s not just the end of one chapter. It’s the beginning of another — one that may involve Form U5 filings. These disclosures play a crucial role in the financial industry, shaping an individual’s reputation and affecting their future career prospects. In this blog, we’ll delve into the intricacies of FINRA’s Form U5 disclosures, explore how firms handle termination language, and discuss the implications of these disclosures for financial professionals.
Navigating Form U5: What You Need To Know As A Departing Advisor
As a financial advisor, leaving your job requires that the firm file a Form U5, also known as the Uniform Termination Notice for Securities Industry Registration. The form U5 is the mechanism through which the firm severs its relationship with you, separating your registration from the firm’s registrations.
Termination Reasons Filed On FINRA’s Form U5
The Form U5 is a document used to report the termination of financial advisor (FAs) registrations from a firm or in a particular jurisdiction. Although there are different types of Form U5 termination filings, such as reporting full or partial terminations or amending past Forms U5, when it comes to full terminations, there are really only three causes: death, being fired and voluntarily resigning. Let’s dive deeper into understanding these reasons in more detail.
Weaponized Form U5
Any time a rep exists at a firm, whether the reason involves an involuntary discharge, a voluntary resignation, or a rep being permitted to resign, firms and broker-dealers are required by the Financial Industry Regulatory Authority (FINRA) to file a Uniform Termination Notice for Securities Industry Registration (Form U5). This flags regulators to investigate the case and determine whether further action is required and if any regulations or rules were violated.
If I’ve been terminated, how long will it be before a Form U5 is filed?
“Ask An AdvisorLaw Expert” is a video series where we ask some of our most esteemed colleagues questions commonly asked by financial advisors. This week, we’re focusing on the topic, “New Disputes And Form U5 Terminations,” with our President and Founder, Doc Kennedy, MBA, J.D. Learn more about our Form U5 termination services, or contact us for a complimentary consultation. …