A significant number of financial advisers have taken serious hits to their reputation since the financial crisis.
In some cases, those dings have been deserved.
For others, however, guilt by association has taken a toll.
An adviser's partner or broker-dealer may have been implicated in a theft, act of negligence or securities fraud, but the adviser was never charged or sued. Or perhaps an adviser was named in some kind of legal action, only to be cleared.
Such accusations about business associates stick to advisers like a bad smell, particularly in this age of electronic information.
Indeed, the number of financial pros seeking to bolster their image on the web has surged 300% in the past two years for one company that manages the “online reputation” of professionals and nonprofessionals.
“There's no delete button for the Internet,” said Michael Fertik, chief executive of Reputation.com. “The financial industry is a top-five industry for us, and it's grown significantly.”
That category includes a wide swath of financial professionals, not just advisers, he said.
“It's everyone in financial services, from private-wealth managers to bankers on Main Street to people in the credit card businesses.”
WON'T GO AWAY
One adviser knows all too well what it feels like to sustain damage to his professional standing that just can't be repaired.
In 2009, former Securities America Inc. registered representative Bradley Hofhines was named in a class action alleging that he and his firm, Summit Retirement Advisors LLC, failed to disclose to clients that returns from investments in Provident Royalties LLC didn't come from revenue of oil and gas properties but rather from commingled funds.
Provident Royalties was an alleged $485 billion Ponzi scheme, built on oil and gas royalties, that collapsed in July 2009 when the Securities and Exchange Commission charged the firm with fraud. Dozens of independent broker-dealers sold preferred shares of Provident Royalties, and many of those firms are no longer in business because of the high cost of defending against and settling investor lawsuits.
Mr. Hofhines' name was later dropped from the suit, which went on to be rolled up with half a dozen other such claims in federal court in Dallas.
But the stories about the initial 2009 lawsuit, including those by InvestmentNews, which cited him, remain indelible on the Internet.
Mr. Hofhines has learned that he can't surmount Google's algorithms. He is no longer a broker registered with the Financial Industry Regulatory Authority Inc. but remains a registered investment adviser.
When potential clients do a Google search for him, the stories about the lawsuit against him and Securities America are among the first to appear.
“When people Google me, it comes up with this lawsuit but nothing that says I was released from it in October 2010,” Mr. Hofhines said. “I shouldn't have been included in the lawsuit.”
He is far from the only adviser with such problems.
A handful of others recently contacted InvestmentNews with similar fears that results of Google searches are either damaging to their careers or simply embarrassing.
The big lesson is that the enduring power of Internet search results needs to be at the front of the minds of advisers as they build their businesses.
Advisers facing such a dilemma can build their positive image simply by creating more positive content on the web, using social-media sites such as Facebook and Twitter.
CONTACT THE WEBMASTER
Users who want content removed from the Internet should contact the webmaster of the page directly. Once the webmaster takes the page down, it will be removed from Google's search results through the company's usual crawling process.
Search engines don't have the ability to remove content or personal information directly from the Internet, so removing content from Google or another search engine would leave the original content that exists on the web. Google doesn't remove content from its search results, except in very limited cases — such as illegal content and violations of its webmaster guidelines.
There is another solution for advisers such as Mr. Hofhines. They can hire a firm such as Reputation .com, but it could cost from $2,000 to $10,000, Mr. Fertik said.
“The stuff you don't like on the Internet, we can't take it down, but we can push it down,” he said of Internet search results. “It doesn't disappear, but it doesn't have nearly the same impact on your life,” Mr. Fertik said.
The firm steers clear of working with individuals with convictions for a variety of crimes, including securities fraud, Mr. Fertik said.
The majority of Reputation.com's clients use the service proactively, he said, declining to reveal how many clients the company has.
“They're not looking to overcome a problem but to make sure they control their reputation on the Internet,” Mr. Fertik said.
Given the destruction caused by the financial crisis, advisers could do worse than heed such advice.
“I'm so pissed off at Wall Street for coming up with this crap,” Mr. Hofhines said, referring to Provident Royalties. “It destroyed my business.”
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