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Chip on Their Shoulders

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A feisty Financial Services Institute kicked off its first major conference outside Financial Planning Association sponsorship with an invitation to individual broker/dealer reps to join for the first time alongside its corporate members. During the Orlando conference, it also stepped up its campaign to raise the profile of the indie community among members of Congress and federal securities regulators.

The two initiatives are closely related, says FSI Chairman Stephen “Tony” Batman, who calls for “grassroots congressional advocacy” on the part of individual advisors. “We have to overcome a perception problem,” adds Dale Brown, FSI’s chief executive officer “Regulators don’t understand our [industry's] business model. They ask, “How do you adequately supervise reps scattered around the country in multiple locations with a 90% payout?”

The answer, suggests Brown and Batman, is first to enlarge the FSI’s ranks by allowing individual reps to join. The FSI already has 103 member firms with some 122,000 registered reps. In addition, the institute has formed a political action committee that plans to raise funds from members for contributions to candidates for federal office. The cost to join for reps associated with FSI member firms is $99/year and $125/year for reps whose broker/dealer is not yet a member. Individual rep members will also be asked to make a donation equal to their membership fee to the FSI PAC.

On top of its new bid to influence members of Congress and other federal officeholders, Batman says that the FSI will attempt to “infiltrate and influence” the National Association of Securities Dealers through board membership and membership on district committees. We want to get involved with NASD at every level.”

Since last spring, FSI has raised the number of independent B/D executives serving on the influential NASD district panels from about a dozen to around 20. “We have 18% of the reps in the country,” says Lon Dolber, CEO of American Portfolios and a member of the NASD District 10 committee in New York. “We need to push back against regulations that seem destined to push us under.”

Brown also suggests that the FSI will fight over the next few months to get one or more independent B/D execs elected to the NASD Board of Governors. While he says the FSI will not at the outset try to push its way onto the board via contested elections–”expensive and messy,” he concedes–he indicates that the institute wants to be able to use that as a threat. ” ‘We want to be able to say, ‘We have the ability to fund’ such an effort and keep it in our back pocket.”


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