Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards

Regulation and Compliance > Federal Regulation > FINRA

FSI's Murphy Upbeat About '08

Your article was successfully shared with the contacts you provided.

New Financial Services Institute (FSI) Chairman Brian Murphy is upbeat about the organization’s agenda for 2008. Murphy, who is also Woodbury Financial Services’ chairman, and executive VP of the Individual Life Division at Hartford Life, Inc., both subsidiaries of The Hartford, is looking to “carry on” the work of his predecessors at FSI, which has been an effective advocate for the independent broker/dealer community, especially with lawmakers and regulators.

Murphy credits FSI’s board and Dale Brown, the executive director of the Atlanta-based association, with taking FSI “from a relatively fledgling organization, searching for its place, to having a very firm foothold in our ability to be a strong advocacy group and having credibility with FINRA and other regulators.” The FSI, launched in January 2004, has “113 member firms with more than 135,000 independent registered representatives,” and “8,000 independent individual members,” according to the group’s Web site, (

Looking back at the group’s achievements for 2007, Murphy is impressed with how well FSI worked with FINRA on its merger of NASD with NYSE enforcement, discussions and education surrounding 12b-1 fees, and quashing a Michigan State tax on advisor fees, which was passed by the Michigan legislature last November but revoked before it became effective in December. For FSI members, he explains that the biggest challenges include moving the group to an influential role: “We’ve really got to influence not only the outcomes of issues but influence more positively the perception that the regulators have of our model. Rightly or wrongly they have a pejorative view of the independent contractor model–that it’s more difficult to regulate.” Murphy says he and other independent B/D execs believe that the independent model is “part of the answer for the future, particularly the middle class and Main Street Americans that are going to need help in the future–and now–more than ever.”

Rather than react to events, Murphy wants to shape FSI as an organization that stands for “advice, especially with the complicated environment that exists and the need for self-security that consumers have; …for the independent contractor rep as a big part of the delivery of that advice, and we’ve got to fuel that profession, not hamper it. We stand for constructive engagement in the rulemaking process.” Murphy spends lots of time “working eyeball to eyeball with regulators on issues of the day.”

Last year was, of course, a big year for independent B/Ds, and the markets, with the merger of NASD and NYSE enforcement into FINRA, 12b-1 fees and annuities under scrutiny, and added market volatility and uncertainty stemming from the credit crunch and housing collapse. How does that alter the agenda for FSI? Referring to the mortgage and credit issues, Murphy asserts, “In any environment and in any economic cycle, anytime something gets superheated and out-of-balance there should be a red flag thrown up–even when there is no problem there should be a red flag because there is no one product, there is no one move, there is no one way that is appropriate in all instances. Once something gets superheated it’s only a matter of time before reality sets in and something acts against it to reset it. The housing crisis and credit crunch are perfect examples of why consumers should work with financial advisors, because they either hear things from the media, or hear things at a cocktail reception, and they think it applies to them. Sometimes they just push it too far and they don’t have that steady hand, and that deft touch, and the steadfast professionalism of restraint that many of our advisors have.”

Investors need “perspective” Murphy adds, “I shudder to think where we would be today if back in 2002, 2003 they weren’t talking people off the ledge–and the ledge is that they wanted to sell everything in the equity markets and get it all in cash or flip it over into gold or whatever the hot thing was at the time.” Better, he argues, for investors to work with planners, brokers, advisors, “to have a long term plan executed by people who are going to have a long-term perspective on things.”

As far as investments in subprime-associated securities getting into the hands of individual investors via independent B/D reps, Murphy says he thinks that generally that is not a big issue for most independent B/Ds: “Our model tends to use conventional instruments to solve conventional problems.”

FSI’s OneVoice Broker/Dealer Conference will take place in Orlando, Florida, January 28 to 30.


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.