When Lon Dolber opened the doors of his broker/dealer on September 11, 2001, he was as shocked as anyone by the events of the day, and it wasn't long before he wondered whether his new firm would survive. But American Portfolios Financial Services, based in Holbrook, New York, did survive, and Dolber, president and CEO, has built a business with 400 professionals and $40 million in annual gross revenues.
Of the 400 professionals affiliated with American Portfolios, Dolber says about 150 are RIAs, and he expects that within five years that number may double. Running a small firm in this regulatory environment is not without its challenges, however. Although Dolber sees a slowdown in new SEC rules, compliance is a major expense for his firm. He says both the SEC and NASD audited the firm last year, which took six months to complete, but complimented the auditors as "smart young people."
Dolber says that newer firms may attract more scrutiny than firms that have a longer track record. At least, he says, he was thus informed when his NASD examination was concluded with a telephone "exit interview." Dolber jokingly says there are three levels of such interviews: by phone, which he says is the lowest level of exit interview; invitation to a meeting at the NASD office at New York's Financial Center; or they come with the handcuffs.
His advice to other firms that are being examined is straightforward: treat the examiners professionally and "don't lock them in a room without air conditioning." Dolber gives them a locking file cabinet for the duration of the exam, and designates one contact person for questions that arise during the exam.
On new disclosure and suitability rules, he says the firm has a "100% focus on suitability," and "good disclosure that doesn't stop execution." To Dolber, education is critically important--to make consumers--and producers--smarter. He sees investment professionals in the future "analyzing, not selling." That's partly why he encourages professionals to continue their education and get their CFP, or become an RIA.--Kathleen M. McBride