The Arizona Designated Broker and Supervision
Arizona concentrates supervisory accountability in the designated broker of each brokerage. This chapter covers the designated broker requirement, the duty to supervise, the Broker Management Clinic, and shared liability for supervision failures.
The Designated Broker Requirement
Every licensed brokerage entity in Arizona must have a designated broker who is legally responsible for supervising and controlling the brokerage's operations and affiliated licensees. This concentrated accountability is the core of Arizona broker regulation.
Duty to Supervise
The designated broker must exercise reasonable supervision and control, including written policies, review of transaction documents, and oversight of trust accounts and advertising. Inadequate supervision is a frequent basis for ADRE discipline against the designated broker personally.
Broker Management Clinic and Shared Liability
Arizona requires the 9-hour Broker Management Clinic to prepare and update brokers on their management and supervisory responsibilities. When an affiliated licensee violates the law, ADRE can discipline the designated broker for a supervision failure in addition to the licensee, so brokers must build systems to oversee funds and transactions.