According to BrokerCheck records financial advisor Russell Blum (Blum), currently employed by International Assets Advisory, LLC (International Assets) has been subject to two customer complaints, one tax lien, and one employment termination for cause during his career. According to records kept by The Financial Industry Regulatory Authority (FINRA), the complaints against Blum concern allegations of unsuitable investments and allegations of overconcentration.
In August 2018 Blum was terminated by SunTrust Investment Services over allegations that the representative did not follow firm procedure regarding updates to his Investment Advisor brochure supplement.
In May 2017, Blum disclosed a tax lien of $99,000 with the IRS. The fact that a broker cannot manage his own personal finances is material information for a client to consider. In addition, an advisor with poor personal finances may be incentivized to sell unsuitable or high commission products that may be recommended to generate high profits for the advisor at the expense of the client.
In May 2016, a customer complained that Blum recommended investments that caused over $1.3 million in damages. The claim was denied.
Brokers are required under the securities laws to treat their clients fairly. This obligation includes the duties to disclose material risks of the investments they recommend and to present products, particularly complex or confusing products, in a fair and balanced manner that allows the client to evaluate the recommendation. Another important obligation advisors have is to make only suitable recommendations for investments to the client. There are many investments that are not appropriate for the majority of investors or for certain investors given their risk tolerance, age, and other factors. Advisors should not present these investment options to clients. There are two screens that advisors must employ to determine whether an investment is suitable for a client. First, there must be a reasonable basis for the recommendation – meaning that the product has been investigated and due diligence conducted into the investment’s features, benefits, risks, and other relevant factors. The advisor must conclude that the investment is suitable for at least some investors and some securities may be suitable for no one. Second, the broker then must match the investment as being appropriate for the customer’s specific investment needs and objectives such as the client’s retirement status, long or short term goals, age, disability, income needs, or any other relevant factor.
According to newsources, a study revealed that 7.3% of financial advisors had a customer complaint on their record when records from 2005 to 2015 were examined. Brokers must publicly disclose reportable events on their BrokerCheck reports that include customer complaints, IRS tax liens, judgments, investigations, terminations, and criminal cases. In addition, research has show a disturbing pattern with troublesome brokers where brokers with high numbers of customer complaints are not kicked out of the industry but instead these brokers are sifted to lower quality brokerage firms with loose hiring practices and higher rates of customer complaints. These lower quality firms may average brokers with five times as many complaints as the industry average.
Blum entered the securities industry in 1984. From July 2003 through July 2015 Blum was registered with Wells Fargo Advisors, LLC. From July 2015 until September 2018 Blum was registered with SunTrust Investment Services, Inc. Finally, since September 2018 Blum has been registered with International Assets out of the firm’s Boca Raton, Florida office location.
Investors who have suffered losses are encouraged to contact us at (800) 810-4262 for consultation. At Gana Weinstein LLP, our attorneys are experienced representing investors who have suffered securities losses due to the mishandling of their accounts. Claims may be brought in securities arbitration before FINRA. Our consultations are free of charge and the firm is only compensated if you recover.