More On Legal & Compliancefrom The Advisor's Professional Library
- Registration Requirements for Investment Advisor Representatives (IARs) When individuals launch an advisory firm, they must avoid marketing themselves or the firm as investment advisors before they are properly approved and registered. Otherwise, they are subject to severe penalties.
- Differences Between State and SEC Regulation of Investment Advisors States may impose licensing or registration requirements on IARs doing business in their jurisdiction, even if the IAR works for an SEC-registered firm. States may investigate and prosecute fraud by any IAR in their jurisdiction, even if the individual works for an SEC-registered firm.
Independent broker-dealer First Allied is rolling out a practice management tool this week as it hosts its national conference in San Diego. Its leadership also is making it clear that its new owner, RCS Capital (RCAP), means access to critical financial resources to fund such programs.
“The last six months have been somewhat liberating in that we can support these plans with increased investment since RCS Capital closed its acquisition,” said First Allied CEO Adam Antoniades, who was tapped as president of Cetera Financial — a group of IBDs also owned by RCAP — last month.
“These capabilities would have taken significantly longer to launch without this support,” Antoniades said.
The new business consulting platform, Pentameter, allows advisors to review their practice, identify areas of improvement and leverage tools to help them “bridge the gaps,” Antoniades added. It was developed in house by First Allied, which is based in San Diego.
As of Dec. 31, the IBD had some $27 billion in assets and nearly 800 affiliated advisors, about 500 of whom were expected to attend this week’s event. The group says total attendance should reach about 1,400 individuals, including some business partners, says Kevin Keefe, president of First Allied.
First Allied and its affiliated IBD Legend Group were acquired by RCAP in September. RCAP is led by Nicholas Schorsch and his partners.
Another new program being introduced to advisors is Guided Retirement Solutions, a platform that lets advisors move into the retirement planning space. “Advisors can compete within it and really enter the market,” said Antoniades.
“It’s an end-to-end solution for all advisors around retirement consulting,” he explained. “We anticipate this should propel us into the forefront of retirement planning. This is an increasingly important capability for broker-dealers.”
The executive says there are only a few players in the space supporting advisors.
“Some might argue we are late to the game,” Antoniades said. “But we can leverage the latest technology and frankly be able to take a more strategic view, look at the landscape and take a best-in-class approach in the development of our platform.”
“Our objective is to help our financial advisors to be more successful and profitable through the entire lifecycle they go through … with different needs at different times of their career and business development,” Antoniades noted. “We want to be sure we have an offering that properly services them, is at the forefront of their practices and addresses what is needed to maintain the intimacy and culture of these businesses.”
'Plaintiff's Attorneys' Distorting Industry
In the 401(k) rollover arena, First Allied and several other IBDs were called out in a recent Bloomberg report. Advisors affiliated with them in the past decade, but no longer, are being sued by investors who lost money in private placements and similar vehicles.
“This is a real challenge, and — to be honest — plaintiffs’ attorneys are getting much more creative in leveraging the media to create an image that is often not appropriate,” Antoniades said. “I have not read the article — but the reality is that this is our new world. The plaintiffs’ market is more sophisticated than ever.
“The way to manage these challenges," he said, "is to hold ourselves to the highest standard of conduct and to ensure we promote the planning discipline, so decisions are made that are really supportable and grounded in solid advice.”
At the national conference, First Allied is stressing how advisors can promote such decision making.
“Every day, there are real solutions being offered to clients to help them navigate pretty tricky waters,” Antoniades said. “That is why we are in the business, and it’s important to recognize that this is true for the vast majority of the industry.”
Check out Retirees Suffer as 401(k) Rollover Boom Enriches Brokers on ThinkAdvisor.