More On Legal & Compliancefrom The Advisor's Professional Library
- Whistleblowers A whistleblower is any individual providing the SEC with original information related to a possible violation of federal securities law. The Dodd-Frank Act established a whistleblower program that enables the SEC to reward individuals who voluntarily provide such information.
- Client Commission Practices and Soft Dollars RIAs should always evaluate whether the products and services they receive from broker-dealers are appropriate. The SEC suggested that an RIAs failure to stay within the scope of the Section 28(e) safe harbor may violate the advisors fiduciary duty to clients, so RIAs must evaluate their soft dollar relationships on a regular basis to ensure they are disclosed properly and that they do not negatively impact the best execution of clients transactions.
This is an extended version of the profile that appeared in the May issue of Investment Advisor, part of AdvisorOne's Special Report profiling this year's members of the IA 25, the most influential people in and around the advisor universe. See the complete list and Special Report schedule for extended profiles of all the 2011 members of the IA 25.
We only had a few minutes with Bill Dwyer, but what he was able to pack into that time was some kind of record. That’s what happens when you’re a senior executive at a large independent broker-dealer (LPL Financial) and involved with an industry advocacy organization at the highest level (FSI), which is why he made this year’s IA 25.
We began with the Financial Services Institute, of which Dwyer is the 2011 chairman.
“This is an unprecedented time for the financial services industry, particularly from the perspective of regulatory changes,” he says, with no hint of hyperbole. “Over 70 years of established rules and regulations are being upended.”
FSI, Dwyer notes, went from being a startup organization to having a major influence on regulators and legislators in just five years. But despite the organization’s success, he notes that its plan for the next five years includes a move beyond mere advocacy.
“Baby boomers are preparing for retirement, and this is significant not just for the size of the demographic but also due to the fact that they have 30 years of defined-contribution experience behind them,” he says. “They are the first generation that will completely manage their own retirement portfolio; they won’t just receive a pension check each month. This means that they will seek—or rather demand—financial advice.”
Dwyer adds that the 55-to-64 age bracket traditionally is a time when individuals experience their peak income, their peak net worth and a sharp increase (45%) in the assets saved for retirement; and the bracket has never been so large.
“It’s an opportunity of equal enormity,” he says. “I believe it will set off the greatest bull market for financial advice that we’ve yet seen. FSI’s advocacy is an enormous piece of its mission, but our five-year plan takes it beyond that to help advisors add real value for clients in the retirement arena.”
The issues FSI is facing are a mirror image of the issues facing LPL Financial, where Dwyer is president of national sales and marketing. He finds himself in Washington advocating on behalf of LPL almost as much as he does for the industry as a whole through FSI.
“One thing that stands out is that the advisor’s business will not grow through market appreciation simply because our analysts tell us returns will be lower going forward,” he says. “If you couple this with lower risk tolerance, it means advisors will have to grow their practices by adding clients. This is significantly more labor intensive, so LPL Financial is doing things that help to increase the advisor's efficiency.”
Advisors, he says, will have to leverage the assistance and capabilities of their broker-dealer or custodian more now than ever before.
“The autonomy that independent advisors experienced in the 1980s and 1990s, almost ruggedly so, is no longer possible,” Dwyer says. “It’s just too costly.”
Read more about the rest of the IA 25.
Don't see someone on this year's IA 25 that you think belongs there? Submit their name and your justification for why they should be considered among the most influential people in and around the advisor universe in the Comments field below. We promise to consider reader nominations, but please, no ad hominem attacks on those who were named in this or past years.--Ed.