The Prosperity Network OSJ had its annual audit in May 2025. The audit lasted two weeks and included a team of 5 auditors. The OSJ responded to 807 requests for information from the audit team. There were only 6 audit findings for the OSJ. We continue to have exceptional audit results annually for OSJ offices of our size and volume. We appreciate all that our members do to remain compliant throughout the year. Your responsiveness and dedication to compliance contributed greatly to our continued excellent annual OSJ audit results.
Findings:
1 - A required New York Insurance Producer Compensation Disclosure form was not found for a customer purchasing an Allianz Index Advantage NY variable annuity. The OSJ review principal did not request this form prior to approving the transaction.
2 - A Trade Review item involving C shares should have noted the funds were not entered as fund exchanges but as separate buys and sales. This resulted in new 1-year surrender periods and a sales credit paid to the financial professional. The OSJ Trade Review Principal did not recognize these issues as the trade item was flagged for a totally different reason (Potential Swap).
3 - A Signature Guarantee Request form listed an incorrect amount. The financial professional incorrectly listed the full account value rather than the amount of the transaction referenced on the form being signature guaranteed. The OSJ did not notice the incorrect amount prior to applying the signature guarantee.
4 - Two emails were noted as being sent with PII but were not properly secured. One of the emails was sent to the advisor’s personal unregistered email address. The OSJ email reviewers did not note these issues during their review.
5 - A rep accepted a check made payable to their DBA name and should have returned the check to the client (Cetera accepted it and cashed it). The OSJ did not notice the check was payable to an incorrect party when reviewing the advisor’s incoming correspondence in Pinpoint.
6 - SEC Marketing rule: Two reports were noted as containing Hypothetical Portfolio Performance without following the required Qualified Client procedures, two reports were provided to clients without a pre-approved template, and there was one instance of sales literature marked “must be preceded by or accompanied by a Prospectus” without evidence of the prospectus being sent to the client. The OSJ email reviewers did not follow up on these items.
Please contact the Prosperity Network Compliance Team with any questions: compliance@prosperityadvisors.com or 913-529-5500 Option 2.
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