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Get Off It, Already

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I believe it is time for the FPA to drop this issue regarding the Merrill Rule, trying to disallow brokers from calling themselves financial advisors [This issue was addressed in the September 2005 "IA Soapbox," among other places.--Ed.]. First, brokers have to jump through the hoop of passing the Series 7 exam to get licensed, but in some states, like mine, a registered investment advisor can theoretically set up shop and not know a thing about investing. Second, brokers are so regulated now that if they don’t do what is in the client’s best interest, they fear being sued or losing their job.

A broker might act like a fiduciary, but he is not allowed to call himself one, while a registered investment advisor may call himself an advisor or fiduciary but could, theoretically, give poor advice or do what’s in his best interest, not his client’s. But if the FPA wants to continue sinking its members’ money into this argument just to gain bragging rights within our industry as the “true advisors,” go for it.

Some investors may not know the difference between a registered investment advisor and a traditional broker, but what matters to them is one who acts like a good advisor or fiduciary.

Michael Sandifer, CFP

(The author asked that we not publish the name of his firm or broker/dealer affiliation on the advice of his compliance department.–Ed.)

The Question’s Been Answered

In response to the question posed by Mr. Punishill of Capgemini, “…who will get the answer first?” in creating a cost-effective family office platform, in your article “Serving Mid-Tier Millionaires” (The Playing Field, August 2005)–for those with $1 million to $5 million in financial wealth, a solution already exists.

The problem is that most advisors are unfamiliar with the program, or are unwilling to adopt a new paradigm for wealth management as a “generalist.” For many advisors, compliance concerns are also a mitigating factor in offering a truly “open-architecture” platform.

They seem captive to the thrill of managing assets, rather than acknowledging the value of someone who can assist in the selection and management of a team of specialists to achieve a truly integrated, coordinated, and comprehensive wealth management platform for affluent clientele.

I disagree with the correlation by CEG Worldwide that outsourcing asset management to a TAMP is the key to success, and I was disappointed that you only briefly mentioned the importance of effectively and efficiently coordinating the activities among third-party providers.

Nonetheless, your article will hopefully prompt any independent advisor seeking to penetrate the affluent market to reevaluate their attitudes and business model. The advice I have given to aspiring wealth management firms for many years is simple: Collaborate or evaporate. I hope that your article will prompt other advisors to consider the implications of failing to do so.

Curtis S. Greenlaw

Family Office Network, LLC

San Diego, California


In Mark Tibergien’s July 2005 column, “Sticker Shock,” we misstated the fee levied by Schwab Institutional for members of its referral program. We said the fee was 15 basis points on AUM; in fact, it is 15% of the advisor’s management fee.

Tables accompanying “Assessing the Roth 401(k)” in the same issue incorrectly showed results as if one had made contributions for 20 years. Updated tables are at