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Investor Protection

Consolidated Reports: A Focused or Unfocused Vision

July 31, 2020

[Photo: 'Lights', by Ksenia Zhivago]



by Howard Haykin



Consolidated Reports – Your Financial New Worth on a Single Page.  How can you get a good handle on your overall financial net worth when you’ve got pockets of assets in various locations - at banks and brokerage firms, in private investments, in artwork, in your home, in trust accounts (for which you're the beneficiary)? A broker or financial adviser can pull it all together … if they do it correctly.



One broker with Avantax Investment Services (then known as H.D. Vest Investment Services), provided over 40 customers with consolidated account reports that “failed to provide a balanced presentation or basis for the customers to evaluate the facts in regard to certain securities listed in the Consolidated Reports.” Over a 2-1/2 year period, this broker issued reports that did not clearly distinguish between assets held at Avantax on behalf of the customer and included on the Firm's books and records, and other external accounts or assets. Furthermore, account values he attributed to multiple securities accounts differed from the values on the corresponding account statements.


These errors or deficiencies most likely would have been detected had the broker bothered to submit the individual consolidated account reports to his Firm prior to dissemination - as he was required to do.



OBTAINING CONSOLIDATED REPORTS.    Customers wishing to avail themselves of this valuable resource should consult with a broker or financial adviser. Customers should inquire as to the reliability of the information presented in their Reports. To be clear, accurate, and not misleading, Reports should fully disclose any and all sources and bases for valuations on which a preparer relied. Finally, inasmuch as Consolidated Reports are “communications with the public,” they must adhere to strict industry rules and standards. Make sure yours is done right.



[For further details, click on … FINRA Case #2018057909501.]