Independent broker/dealer compliance officers are griping that federal and state securities regulators are piling on so many regulations and making so many inquiries that they don’t know what they should do first. But any hopes they might have had for relief were dashed during the Financial Planning Association’s annual B/D conference in Huntington Beach, California.
Officials from the Securities & Exchange Commission, National Association of Securities Dealers, and Connecticut’s securities department told compliance execs Jan. 24 that they are already targeting new areas of concern even as they ratchet up the pressure for fuller disclosure of mutual fund payments for shelf space at broker/dealer firms.
Asked what major compliance issues would be in the spotlight by the time next year’s B/D meeting rolls around, Robert Errico of the NASD said he expected regulators will be seeking “heightened supervision” of registered representatives as well as taking a closer look at B/D sales practices. In addition, he and SEC attorney John Walsh both indicated that regulators plan increased scrutiny of B/D e-mail retention. “This is going to be a hot topic,” said Walsh.
The Financial Services Institute, the new organization representing independent B/D firms that split off from the FPA, has a healthy budget of $600,000 to $700,000 for its first year of life. But a number of industry executives are wondering where the money will come from.
FSI officials made a pitch to prospective B/D members and corporate sponsors during the three-day conference–the last under FPA auspices–that was held January 22-24. Large B/D firms expect to pay from $6,000 to $8,000 to belong to the FSI, while the price tag for major sponsorships by mutual fund and other financial firms could run as high as $100,000. “A good play on both sides is going to cost us 50% more,” complains an executive with one major B/D that expects to sign up for the FSI in addition to its FPA membership. “But it’s kind of hard to back away from the FPA. They have a membership we are still interested in talking to.”
However, some mutual fund officials question whether they have the budget to support both the FSI and FPA. If the flow of new membership or sponsor funds flags, members of FSI’s board of directors may be asked to pony up extra cash to get the association off the ground. “If we ever face a capital call, I’ll write a check for $100,000,” says FSI Chairman Stephen A. “Tony” Batman, CEO of Dallas-based 1st Global Inc.
New Name for FPA’s Major Meeting
Now that B/Ds have their own association and conference schedule, the FPA has quietly dropped “Success Forum” as the title of its popular annual convention. This year’s meeting, from September 10 through 14, will be called “FPA Denver 2004, the gathering of the global financial planning profession.” It will be held at Denver’s Colorado Convention Center.
Although registered reps comprise 60% of FPA’s membership, some B/D executives were heard to complain that the name change for the conference was yet another move by the FPA to back away from its identification with B/Ds. The FPA is closing its Atlanta headquarters, the home of both the former International Association of Financial Planning and the Financial Services Institute, in favor of a single home base in Denver, headquarters of the former Institute of Certified Financial Planners. The FPA’s new executive director, Marvin W. Tuttle, is a former ICFP official as well. Tuttle was named earlier in January to succeed Janet McCallen, a former IAFP executive director, who was ousted from a similar position at the FPA by the association’s board.