The Covid-19 pandemic and the subsequent move to work-from-home arrangements have presented new challenges to wealth management firms, according to a panel of lawyers hosted last month by Bates Group.
Employers are now faced with an unprecedented situation having to balance guidance from the Centers for Disease Control and Prevention, local and federal requirements and the health of their employees, which up to now has been a private issue, according to Beverly Jo Slaughter, managing counsel at Wells Fargo.
To stay ahead, managers should be sensitive to issues such as people opting to continue wearing masks while also directly addressing employees who say they don’t feel safe at the office, Slaughter said.
Slaughter added that firms may need to accommodate employees differently now that advisors have had the opportunity to evaluate their situations amid the pandemic. “Financial advisors had time to consider whether they wanted to continue to be an employee, an independent contractor, and where are the best opportunities to service clients,” she said.
Advisor supervision is an area affected by remote-work arrangements, but Slaughter and Bates Group managing director Ralph Blascovich both believe that firms already have the necessary tools to police employees properly. Blascovich pointed to annual compliance reviews, regular reviews of email and checking social media, while Slaughter said firms can look at declining production and frequent or large withdrawals, among other red flags.
Among possible compliance issues have been the increased use of social media as well as unapproved or personal systems during the coronavirus crisis, according to the Bates Group.
Carole Miller, a principal at the law firm Bressler, Amery & Ross, said that this has led to “a lot of disciplinary action.”
The panel also addressed the increased dangers of alcohol and substance abuse during the pandemic. In a remote-work arrangement, it’s easier to hide a problem, but Miller said that human resources departments can spot potential issues by observing “the missed deadlines, the slurred speech, the tardiness, the nonsensical emails.”
Wells Fargo's Slaughter added that firms should remind staff of employee assistance programs so that issues can be escalated and managed.
Miller and other experts also said that they expect a rise in employment claims as a result of some of the issues now facing companies and advisors, as well as the lifting of moratoria on terminations put in place during the pandemic.
Companies, they said, should be ready to back up the language they use on Forms U5.
“When you prepare a U5, you have to use true and accurate information, but also make sure not to increase a firm’s risk of future litigation,” said Joseph Thomas, director at Bates Group.
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