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Regulation and Compliance > Federal Regulation

An Insider's View: Christopher K. Abts

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For this issue of Market Conduct & Suitability, Senior Market Advisor editor Daniel D. Williams spoke with Christopher K. Abts of Cornerstone Retirement Group in Reno, Nev., to get his thoughts on compliance, suitability and senior protection issues. Following are the highlights.

Senior Market Advisor: What changes are you seeing in the industry (from a suitability and compliance standpoint)?
Abts: We have our own systems in place to determine if a certain product is suitable for a client that are far more detailed than the current suitability requirements in place in the industry today. So I believe the current suitability requirements are just the start, and while the paperwork requirements have clearly become more time consuming, I see this trend continuing.

SMA: What can you tell me about senior protection issues? How do you see that getting better?
Abts: Until advisors can learn to police themselves and weed out the bad apples, the industry will respond to senior protection issues by continuing to require more paperwork.

SMA: What can companies do (from a compliance and education standpoint)?
Abts: Maybe a course on ethics.

SMA: What can you tell us about senior designations? Are they valid? Where is the designation issue going?
Abts: If it’s not earned, it’s not a designation. You have to question a designation that can be earned over a weekend. Hence, another reason why the need for more compliance.

SMA: Is there anything you’d like to add about compliance and suitability that would educate financial advisors?
Abts: When an advisor is serious about what he does, the business will grow and he will no longer become concerned about where his next paycheck will come from. This in turn will hopefully reduce his chance to “compromise” his ethics to make the next sale. Create a business plan and look long term. A solid reputation in your local community is worth far more than compromising your ethics to make an easy sale.


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