More On Legal & Compliancefrom The Advisor's Professional Library
- Privacy Policies and Rules Whether an RIA is SEC or state-registered, the firm must have policies and procedures in effect to protect clients privacy. Policies and procedures should explicitly require an RIA to send out its privacy notice each year.
- Conducting Due Diligence of Sub-Advisors and Third-Party Advisors Engaging in due-diligence of sub-advisors isnt just a recommended best practice it is part of the fiduciary obligation to a client. An RIA should be extremely reluctant to enter a relationship with a sub-advisor who claims the firms strategy is proprietary.
Keith Kelly, executive vice president and COO of the Financial Services Institute, played emcee to a host of senior leadership at the advocacy organization’s annual OneVoice conference, held this year in Orlando on Jan. 23-24. The message? FSI is taking up the flag in Washington to fight for independent broker-dealers and their affiliated reps, and they’ve got the wins to prove it.
Kelly first introduced Jim Nagengast, president and CEO of Securities America and this year’s conference task force chairman. Reflecting this year’s conference theme, “Partnership: Because our future depends on it,” Nagengast told the audience the value of FSI will be apparent in 2012 as new regulation takes hold, combined with a far from certain general election.
“Some days, I wake up feeling like ‘It’s time to make the doughnuts,’” Nagengast said. “Other days, I wake up feeling like I need to save the world for the financial services industry, because there is a lot happening. When an organization like FSI calls, we all need to say, ‘How can I help?’”
Nagengast encouraged attendees to hit all the networking and educational sessions, noting that it was at last year’s conference that he first met Richard Lampen, head of Ladenburg Thalmann Financial Services, a firm that would eventually buy Securities America later in 2011.
“We met here, and now he’s my boss, so you never know what will happen [at the networking events],” Nagengast said to laughter and applause from the audience.
He added that new additions to the conference include a separate technology track, separated out from the operations track where it traditionally resided. He also mentioned the 640 attendees present this year, a new record, and the 40 sponsors in the exhibit hall. And similar to LPL Financial in 2011, FSI membership fees for advisors affiliated with Securities America, Triad Advisors and Investacorp are being paid for by their respective firms, one reason the organization count 34,000 now as members.
He ended by quoting "Spider-Man," “'With great power comes great responsibility.’ We have to hold Congress and regulators accountable for the power with which they’ve been given.”
Kelly (left) then introduced Joe Russo, chairman and CEO of Advantage Financial Group and 2012 chairman of the board of directors for FSI. Kelly noted he is the first advisor to hold the position.
Russo began by recognizing immediate past chairman Bill Dwyer of LPL Financial, as well as this year’s vice chairman and next year’s chairman Larry Roth of Advisor Group. Noting that the men were tall, he said Roth was “too big to fail” a reference to AIG, which owns Advisor Group, a quip that elicited groans from the audience.
“FSI helps to regulate the regulators, we are not the enemy,” Russo said. “[They] didn’t detect the Ponzi schemers, because the schemers were very good at filling out [their] forms. The bad guys hide in the minutia of the paperwork regulators foist on the rest of us.”
Russo pointed to a number of rules and regulations the organization has either had a hand in stalling or significantly rewriting, including the Department of Labor’s fiduciary rule governing IRAs, the controversy over 12b-1 fees and the protection of the independent contractor status.
Lastly, Kelly introduced FSI president and CEO Dale Brown (left), who noted the over 200 first-time attendees. He too commented on recent FSI successes, adding that they were due to “a clear mission, a focused strategy, and bold membership and an engaged membership.”
“When we started out as an organization in 2004, regulation was horrendous,” Brown said. “It’s still onerous today, and it may get worse still before it gets better. But FSI’s agenda is your agenda. We will aggressively advocate for the issues that matter to you and your clients.”
He then reviewed the status of the organization’s five-year plan, initiated at the 2011 conference, specifically noting the increase in financial support from member firms and the increase in the organization’s staff.
“Our competitive advantage is our story,” he concluded. “It is one that serves Main Street financial goals for our clients. They are a dignified retirement, paying for their children’s education and caring for elderly parents."
Read more AdvisorOne articles on FSI OneVoice 2012 at our OneVoice home page.
Follow editor Jamie Green's tweets from the FSI OneVoice 2012 conference.