Bankruptcy: Bump in the road or reason to exit?

Liz Skinner’s story on advisers bouncing back from personal bankruptcies raised a hot-button question among readers: Should advisers face regulatory action after filing for bankruptcy? Reader loneMADman’s belief that bankrupt advisers should exit the industry elicited some strong responses from other readers.
“If you are a financial adviser and file for bankruptcy, you should exit the industry. End of story.” — loneMADman

“In certain contexts, an adviser may be a better adviser after filing bankruptcy than before — if they learned from it. To say that they should exit the industry, with zero context taken for their particular situation, is no better than the SEC or Finra taking zero tolerance attitudes [with regard to] advisory firm compliance.” — theshawn
“An adviser’s filing personal bankruptcy has nothing to do with how they handle clients’ money. You mean to tell me that if my mother-in-law entered a nursing home and I blew through $150,000 in savings to keep her alive, which forced me into bankruptcy, then I should exit the industry?” — scott
“I think it is stale, naive and extremely misguided to claim broadly that any financial adviser who files for bankruptcy should be forced out if the industry, especially in light of what has occurred in this country over the last five to six years.” — JMMMM
“This is a tough business. A few bad years doesn’t mean the adviser is irresponsible, a bad adviser or a poor salesperson.” — Goodguy6410
“It’s very commonplace to see firms hiring reps despite a bankruptcy, bad credit, foreclosure or brushes with the law. It’s akin to saying anyone overweight shouldn’t be a doctor.” — Banana Fanabobana
Go to InvestmentNews.com/bankruptcy to read the full story and reader comments.