{"id":10330,"date":"2021-12-09T14:41:33","date_gmt":"2021-12-09T19:41:33","guid":{"rendered":"https:\/\/www.silverlaw.com\/blog\/?p=10330"},"modified":"2021-12-09T14:41:33","modified_gmt":"2021-12-09T19:41:33","slug":"did-your-financial-advisor-borrow-your-money","status":"publish","type":"post","link":"https:\/\/www.silverlaw.com\/blog\/did-your-financial-advisor-borrow-your-money\/","title":{"rendered":"Did Your Financial Advisor Borrow Your Money?"},"content":{"rendered":"<p><a href=\"https:\/\/www.silverlaw.com\/blog\/brokers-allowed-borrow-customers\/#:~:text=Not%20only%20is%20it%20prohibited%20for%20a%20broker,steps%20to%20take%2C%20contact%20the%20Silver%20Law%20Group.\" target=\"_blank\">Brokers<\/a><a href=\"https:\/\/www.silverlaw.com\/blog\/brokers-allowed-borrow-customers\/#:~:text=Not%20only%20is%20it%20prohibited%20for%20a%20broker,steps%20to%20take%2C%20contact%20the%20Silver%20Law%20Group.\" target=\"_blank\"><img loading=\"lazy\" decoding=\"async\" class=\"alignleft wp-image-9940 size-medium\" src=\"https:\/\/www.silverlaw.com\/blog\/wp-content\/uploads\/2021\/04\/FiverrRecovery2-300x200.jpg\" alt=\"Brokers and financial advisors are under a fiduciary duty to put the client first\u2014a relationship that gets muddied whether the loan is in writing or not. The Financial Industry Regulatory Authority (FINRA) has a rule in place prohibiting a broker from borrowing or lending money to customers in most instances.  There are few exceptions to FINRA Rule 3240, which forbids customer loans unless the customer is \u201cin the business of providing credit or loans,\u201d or the customer and broker are members of the same immediate family.  FINRA\u2019s Rule 3240 defines immediate family as \u201cparents, grandparents, mother-in-law or father-in-law, husband or wife, brother or sister, brother-in-law or sister-in-law, son-in law or daughter-in-law, children, grandchildren, cousin, aunt or uncle, or niece or nephew, and any other person whom the registered person supports, directly or indirectly, to a material extent.\u201d  Unfortunately, brokers routinely violate FINRA rules, borrowing money from unsuspecting clients while failing to disclose these deals to their financial institutions as required.  Rule 3240 requires brokers to report customer loans to their financial institutions and get consent beforehand in writing. And even when brokers repay a customer\u2019s loan in full, FINRA prohibits the transaction. While registered investment advisors (RIAs) are not governed by FINRA Rule 3240, they still have a fiduciary duty to put the customer\u2019s financial interest first, which similarly precludes their borrowing money from clients.\" width=\"300\" height=\"200\" srcset=\"https:\/\/www.silverlaw.com\/blog\/wp-content\/uploads\/2021\/04\/FiverrRecovery2-300x200.jpg 300w, https:\/\/www.silverlaw.com\/blog\/wp-content\/uploads\/2021\/04\/FiverrRecovery2-1024x683.jpg 1024w, https:\/\/www.silverlaw.com\/blog\/wp-content\/uploads\/2021\/04\/FiverrRecovery2-768x512.jpg 768w, https:\/\/www.silverlaw.com\/blog\/wp-content\/uploads\/2021\/04\/FiverrRecovery2-1536x1024.jpg 1536w, https:\/\/www.silverlaw.com\/blog\/wp-content\/uploads\/2021\/04\/FiverrRecovery2-2048x1365.jpg 2048w, https:\/\/www.silverlaw.com\/blog\/wp-content\/uploads\/2021\/04\/FiverrRecovery2-1000x667.jpg 1000w, https:\/\/www.silverlaw.com\/blog\/wp-content\/uploads\/2021\/04\/FiverrRecovery2-180x120.jpg 180w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/a> and financial advisors are under a fiduciary duty to put the client first\u2014a relationship that gets muddied whether the loan is in writing or not. The Financial Industry Regulatory Authority (FINRA) has a rule in place prohibiting a broker from borrowing or lending money to customers in most instances. <a href=\"https:\/\/www.silverlaw.com\/blog\/did-your-financial-advisor-borrow-your-money\/#more-10330\" class=\"more-link\">Continue reading \u203a<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Brokers and financial advisors are under a fiduciary duty to put the client first\u2014a relationship that gets muddied whether the loan is in writing or not. The Financial Industry Regulatory Authority (FINRA) has a rule in place prohibiting a broker from borrowing or lending money to customers in most instances. Continue reading \u203a<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[580],"tags":[],"class_list":["post-10330","post","type-post","status-publish","format-standard","hentry","category-stockbroker-misconduct"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Did Your Financial Advisor Borrow Your Money? &#8212;<\/title>\n<meta name=\"description\" content=\"Brokers and financial advisors are under a fiduciary duty to put the client first\u2014a relationship that gets muddied when a loan is made.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.silverlaw.com\/blog\/did-your-financial-advisor-borrow-your-money\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Did Your Financial Advisor Borrow Your Money? 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