In The News
Ellen Bessner Quoted in WSJ on Spotting Red Flags When Buying a Book of Business
On July 9, 2010, Ellen Bessner was quoted in "PRACTICE MGMT CANADA: Spotting Red Flags In Buying A Business," an article which appeared in the Wall Street Journal. The article focused on doing due diligence when buying a book of business from another financial advisor.
Ellen advised that buyers should be sure there are assets and not liabilities. "You don't want to be stuck with lawsuits and regulatory issues."
To ensure a clean purchase, Bessner said buyers should do a mini audit and scrutinize the type of products in which the selling advisers' clients have invested.
Advisers should see not just the amount of the assets under management, but also how much assets are borrowed, and if those leveraged loans are suitable for the client.
Buyers should also determine whether the adviser has had regulatory complaints or has been sued. Know-Your-Client forms should also be reviewed to see if they are up to date.
"Look beyond the KYC form -- is there a paper trail of communication? Is there a supervision program and a documentation back up?" Bessner said. "If those aren't in place, that's a red flag."
Ellen is a litigation partner who has developed a special niche representing investment dealers, mutual fund dealers, Portfolio Managers, compliance officers, branch managers/supervisors, and advisors in Ontario courts of all levels and at various regulatory tribunals.