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Ex-LPL FA Who Prepared Will for Client Broke Outside Biz Rules: Finra

By Peter Rawlings March 2, 2021

The Financial Industry Regulatory Authority says it has suspended and fined a former LPL Financial advisor who allegedly broke its outside business activities rules by preparing a will for an elderly customer.

Scott Hansen, who had been with LPL for 14 years, had crafted an irrevocable family trust agreement for a 70-year-old customer in hospice care, despite not being a lawyer himself, according to a letter of acceptance, waiver and consent published by Finra last week.

Hansen agreed to the three-month suspension and $7,500 fine without admitting or denying the findings.

According to the letter of acceptance, Hansen downloaded sample wills and trust agreements and modified them to fit what he thought were his elderly customer’s wishes.

Hansen then billed the customer’s son $5,050 for preparing the trust agreement and will, and for estate planning, in violation of Finra Rule 3270, which requires registered reps to provide advance notice of outside business activities to their firms, the self-regulator says.

The outside businesses of registered representatives have been a persistent area of focus for Finra examiners. Recent cycle exams by the self-regulator have devoted a significant amount of time to reviewing outside business activities and private securities transactions, Stephen Murphy, managing director of compliance consulting firm Foreside, noted earlier this month.

Hansen was discharged from LPL, where he was registered until April 2020, after allegations that he had prepared the will and trust without prior disclosure and firm approval, according to his BrokerCheck records. He has been in the industry since 1997 and previously worked for Wells Fargo Broker Services, Wells Fargo Investments, and Wells Fargo Securities, according to BrokerCheck.

Hansen has been registered at Moab, Utah-based registered investment advisor firm Black Coffee Investment Management, which he owns and for which he serves as chief compliance officer and advisor.

In May 2020, the Colorado Supreme Court also enjoined Hansen from the unauthorized practice of law and ordered him to pay $7,500 to the relatives of the Colorado resident and customer for whom he had drafted a will and trust.

In his comments on the proceeding initiated by the Colorado Office of Attorney Regulation Counsel, Hansen said he had never represented himself to the family as an attorney. He added that he had given the modified prototype documents he downloaded from Legal Zoom to the client’s family and had advised them to have the will and trust reviewed by an attorney.

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Tags:  Fees and compensation , Regulatory/legal issues , Special services , LPL Financial , Wells Fargo

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