The Financial Industry Regulatory Authority censured and fined United Planners Financial Services of America, headquartered in Scottsdale, Arizona, $200,000 and its Chief Compliance Officer Douglas Hall $15,000 for what FINRA alleges is inadequate supervision of variable annuity sales by the firm's 131 field offices of supervisory jurisdiction (OSJs).
With United Planners operating an independent broker model with 254 branch offices and 429 registered personnel, including 100 field OSJ supervisors, many offices featured just one or two persons effecting VA transactions, representing up to 41% of the firm's revenue, or approximately $2.7 million per week.
FINRA found that when written supervisory procedures were written in January of 2007, the firm failed to revise the documents when it introduced a Home Office OSJ Supervisor half a year later. Furthermore, FINRA found that the original written supervisory procedures were not always followed.
In one instance, FINRA found a written procedure was disregarded because the firm had decided obtaining sponsor-provided reports was "too difficult."
Similarly, FINRA found that the firm's practice of reviewing variable annuity transactions was inadequate, with written supervisory procedures allowing the 100 OSJ supervisors who also sold VAs to review and approve their own transactions without review by a third party. FINRA also discovered that a weekly blotter containing transaction information was inadequate for the firm to conduct appropriate reviews of these transactions.
FINRA believes that as CCO, Hall was responsible for reviewing the firm's written supervisory procedures, alleging that he failed to reasonably carry out these duties by failing to recognize or otherwise react to change the deficient supervisory written procedures.
If you have invested in a variable annuity with United Planners Financial Services of America or any other brokerage firm and believe the investment has proven harmful to your financial interests, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for a consultation.