Brooke Southall

Even professionals with B/D experience find that FINRA doesn’t give firms the benefit of the doubt like the SEC does. The CCO of a brokerage firm needs a FONOP partner that will file and take responsibility for the monthly net cap requirements. It was something I underestimated but my FINOP never did!

Many disturbing features here so let's just begin by noting you are in genesis with 2014 your charter date and right out of the gate material absences exist.  Things like ethical actions, supervision of staff, prudently ensuring the business effectively can preserve customer accounts, and their integrity.   Rules spanning   17a-4, 17a-3, 4511 – business critical rule requirements found in the "Exchange Act" but not in your shop involves those important documents relating to every aspect of the business.  Seems you felt  "trade confirmations" were no longer needed.  If there is one area BD's must not disrespect or meddle in- it is the evidence of customer account information- found in the trade confirm.    However, the big, messy one is the 17-a, 17a-3 and 4511 failures present- these can illustrate for everyone, in clear, succinct, neon bright cascading torrent of color just what caliber of a professional tam is at work over there.  This  one will keep you  a level ! Audited shop for a good number of years- like 6.  Level I  members get audited each year- by the Finra staffers who like to get their hands dirty.  When no surveillance or supervision is in place for emails and IM"s ( looks like you misplaced hundreds of thousands of them, WHAT, DOES ACORNS stand for "ALL CORRESPONDENCE NEEDS SHREDDING?") you create a safe way for staff members to trade on insider information, abuse the public, and even customers plus   you introduce the likelihood of  financial theft opportunity   and AML activity.  Finally,  you confuse your reader here a bit- a clearing firm custodies the assets of the asset owner / account owner - and in order for a bd to be self clearing they must be a 250k net capital broker dealer.  An  Omnibus -wrap relationship is what you have with the thieves over at Apex.  The sub accounting and allocation of trades can be done with a third party or with linking the trading system interfaces, etc.              CONCLUSION:  The regulatory pressure will be thick and they will try to break spirits by auditing you in July and August each year.  With this AWC fresh in their minds the only swift and safe solution is to bring in a heavy hitting compliance officer with a reputable track record- the arrival of this person will reverse all perceptions and restore you to a routine audit only member  where people smile at one another, and morale is restored.  For example, bringing in someone like me, would do just that.  Let me know if I can help-  we'd need to heighten supervision for a time but this is unrelated to firm growth.

A year after Acorns gets outed, Betterment faces its juvenile past with 2018 FINRA settlement over 2014 infraction

Betterment

Acorns

Stripped down to its essentials, financial advice is a fairly straightforward proposition. Done well, a highly ethical individual stewards the assets and actions of an investor in a personal and professional interchange.
 
But now a vibrant new class of entrepreneurs is staking their fates and their fortunes on the premise that financial advice can be delivered in a better, cheaper, easier, more ethical, more transparent manner and, as a bonus, in a way more devoid of human annoyance on both ends of the transaction.
 
Cue the robo-advisors, arguably a callous misnomer for automated asset management. 
 
The prototypical robo-advisory entrepreneur has more brands on his or her resume than NASCAR. The bona fides of these industry upstarts often include Ivy-level colleges and MBA programs at Harvard or Stanford. They are often flush with IPO dollars realized at concerns like LinkedIn, Facebook, eBay, Amazon  and Microsoft. 
 
Robo-folk believe that technology is not an enabler of advice but rather, if engineered correctly, advice itself in digital form. 
 
And, they believe the best solutions originate in Silicon Valley or academia, not Wall Street. Robo-entrepreneurs are white-boarding the whole business model, culture and technology from scratch in the conviction that little can be learned from a legacy advice system still rooted in an investment banking culture acting under the core premise that if stockbrokers get rich some of the good effects will trickle down to clients – with the clients none the wiser. 
 
Robo-advisors are a scintillating topic for students of the advice game as they grow by hundreds of millions in assets every month, constantly evolve their business models and receive cash infusions from ever-larger swaths of venture capitals.
 
Throw in the fact that robo-advisors have yet to see a dime in profits -- and won’t in the foreseeable future -- and you have real intrigue. 
 
RIABiz has avidly covered the fast-evolving robo-advice phenomenon and will continue to do so. We present the growing body of articles here.

Robo-Advisors

The $14B robo's ADV will remain clean but it'll live -- like Acorns before it -- with a BrokerCheck violation based on how it managed cash when it was a $608-million firm with a smaller compliance staff

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