From the July 2008 issue of Boomer Market Advisor • Subscribe!

"What one issue in the broker/dealer industry is keeping you awake at night?"

Scott Romine,
chief executive officer,
National Planning Corp.

I have more than just one. The current regulatory environment is certainly a concern, especially as it relates to 12b-1 fees and Regulation S-P. How these issues resolve themselves is something we're watching closely. Irrational markets are also a concern; how investors react to what's going on out there (and the emotional decisions they might make as a result) are keeping things volatile. Lastly, irrational competitors are keeping me awake at night. Will they overreact to current market conditions to the detriment of the industry? Will they react in a positive way? What about with privacy issues? How will they interpret what's out there? So all of these questions are top-of-mind right now.

Larry Roth,
president and CEO,
AIG Advisor Group

It's the issue of, "How will we take advantage of all the opportunities that are presented to us?" I know that sounds corny, but AIG has given us money to build out our investment advisory platforms and our back office, and now the redesigns are coming to fruition. We're a well-capitalized company and we're actually built for this type of market. Our advisors' clients take comfort in being aligned with a good company. We actually get better clients in this type of market because they're a little nervous, so that gets them focused. It's something they're not all that concerned about in an up market, but they get serious in a down market and that's a good thing. This type of market also helps us with recruiting. We get calls from advisors that are afraid the smaller shops they're aligned with might not survive. The same goes for executives, and we've been getting calls from some really top-notch executives that want to come on board.

Thomas Oliver,
chief executive officer, United Planners'
Financial Services

Regulation, definitely. And more specifically, regulation that is not derived from people who are in the retail business. We've lost some of the input from the field when it comes to making regulatory decisions. These are the guys most affected by it, so that's a problem. Regulators say they want to protect the client. Well, guess what? So do we. But now we're drowning in paperwork, which makes the client process cumbersome and may do more damage in the end. It removes the pride associated with being a financial advisor, and makes the rep a paper pusher.

Ryan Diachok,
vice president of marketing & business development,
Geneos Wealth Management Inc.

You can say compliance and recruitment pressures and fee compression are all things that are keeping us awake at night. But honestly, it's really about keeping our existing rep force happy and ensuring they have everything they need to do the same for their clients. One of the biggest sources of advisor frustration is with a broker/dealer's back office, and we're very much attuned to that. So we're constantly surveying our reps to make sure we're meeting their expectations and needs and to ensure we have the right procedures in place to provide the highest quality service possible.

Lincoln Anderson,
Managing director, chief economist, chief investment officer,
LPl Financial

If the oil keeps going up, sooner or later it's going to break the back of the U.S. economic expansion. It hasn't yet but it will at some point. I don't know what the magic number is, but there is a number that drains enough consumer purchasing power out that we'll end up in a recession. And then if the dollar continues to fall (but it looks like it's stabilizing), it really destroys international investor interest in the U.S. financial markets, which would be another blow.

Janine Wertheim,
president, Securities America Advisors Inc.

Keeping up with regulation is what keeps me awake at night; making sure our advisors are dotting the I's and crossing the T's in this highly litigious and regulated environment. This requires a lot of communication on our part, and it's something we're constantly staying on top of. But the fact that we have such a high-quality rep force helps. They're engaged with what's going on in their own right.

Keith Gregg,
president and CEO,
First Allied Securities Inc.

The fast pace of change keeps me up at night. It seems it's faster than it's ever been and only getting faster. Whether it's regulatory change, changes in the markets or business model change - whatever - it's almost impossible to forecast out further than a year. It's tough to put together a three-year business plan at this point, let alone a five-year plan. The velocity of change is something we're constantly dealing with.

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