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All in a Day’s Work
All in a Day’s Work
05.12.2014Are you a Registered Rep who employs an assistant? If so,
continue reading to find out how checking your assistant’s work can sometimes
make the difference in avoiding large E&O claim costs.
Claim Scenario:
The client instructed his broker to buy 15 units of a bond within her brokerage
account. The registered representative’s assistant entered the trade amount in
the trade system incorrectly which resulted in the purchase of 380 units. As a result, the trade had to be corrected 3
days later which resulted in a market loss for the client.
Estimated Claim Cost:
$20,000
Loss Prevention Tip: Check the work of registered assistants before
sending trade orders or distribution requests to insure accuracy (e.g., correct
account number; correct investment fund listed; correct number and amount of
shares to be purchased).
Errors & omissions claims
often result from errors made by support staff. Create a system of checks
and balances so that trade tickets and account transactions are monitored,
reviewed and verified for accuracy prior to execution. This will reduce the
likelihood of erroneous trades and prevent future claims.
All information provided in this blog is for informational
purposes only. The sources used are presumed accurate. CalSurance Associates,
Brown & Brown Program Insurance Services, Inc. and Brown & Brown, Inc.
will not be liable for any errors, omissions, losses, injuries or damages
arising from its display or use and will not assume responsibility for any misguided
information. No guarantees are implied.
Written by
CalSurance Team
Published May 2014
