We are a medium size community bank with a small Nondeposit Investment Product program - have one person who meets with clients and makes recommendations and so forth.

We do an internal audit of the area, but do not have an independent risk management program. I was wondering what other community banks do to monitor the recommendations made by the financial advisor.

Do you:
1) Have someone in MGMT review the recommendations made to clients for suitability
2) Have the financial advisor submit a report to the BOD detailing investment products and recommendations made to clients based on their risk tolerance, age, tax considerations, etc.
3) Some other type of review or monitoring

Below is a recent article detailing how a financial advisor working for a bank was suspended and fined for selling unsuitable investments to customers - something I am sure none of us want to see at our banks

http://www.bankinvestmentconsultant.com/...ble-investments

Any comments are much appreciated. Thanks

Are these investments going through a third party?

Yes we have an agreement with a third party broker/dealer

See if the third party has a robust review program as well. That may help tailor your review program if they have strong controls in place....you would still need to review but you can also review their monitoring program controls as well.