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Regulation and Compliance > Federal Regulation > FINRA

Ron Carson's Registration Drop Shows 'FINRA's Days Are Numbered'

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When Ron Carson drops the mic, people pay attention.

The head of the Carson Group says he will end his registration with the Financial Industry Regulatory Authority this year and work on buying up commission-based assets from the nearly 90 firms in its network that want to follow him.

The popular advisor laid out his plans during this week’s MarketCounsel Summit in Las Vegas, when he spoke with

“This is a milestone for Ron Carson,” said Tim Welsh, head of the consultancy Nexus Strategy, in an an interview just after the MarketCounsel event.

“He is one of the No. 1 trainers for financial advisors. And when one of the leading trainers says ‘it’s time,’ that sends a powerful message to the industry: FINRA’s days are numbered,” explained Welsh. “FINRA is still losing BDs. No one is starting them. It’s not happening.”

(In general, FINRA regulates broker-dealers and their registered representatives, while the SEC supervises RIAs.) 

Overall, the move is logical for Carson and the group he leads, which includes technology, marketing and other operations centered on financial planning and not commissions. “They’re working with a wealth management proposition, not just stock trading,” Welsh said.

This business approach is why Carson’s decision to end his individual registration and to support others doing so “makes sense,” Welsh says. “He has put his stake in the ground and is betting on it, so he might as well go all the way.”

New World

The bet is less risky than it was a few years ago.

“We have fought the Department of Labor’s [proposed] fiduciary rule, and it lost,” said Welsh. “There are better ways to do advisory work. Go as an RIA and build better results for the business and … clients. Why go the other way?”

As Welsh points out, other popular industry players — like Ric Edelman and United Capital founder Joe Duran — made the move earlier.

“All your famous celebrities in the business are RIAs,” he said. ”Ron’s been the last holdout. But the days of go-go-go production [based on commissions] are over. No one is promoting it.”

Other industry watchers support what Carson is doing. “This follows the strategic arc of moving away from FINRA that Ron started years ago,” said David DeVoe of the M&A consulting firm DeVoe & Co. “Ultimately, this is good for the RIAs on his platform, and good for their clients.”

Carson says he plans to set up a limited broker-dealer to buy up commission-based assets; at the same time, advisors in the Carson Group network can keep trading with commissions via Cetera, according to the WealthManagement news report.

His overall approach “makes sense” as part of broader shifts happening in wealth management today, since its reflects what baby boomers, millennials and other demographic groups want, according to Denise Valentine, a senior analyst with the research firm Aite Group.

“There are new opportunities” for clients and advisors to benefit from innovative technology, the current holistic-planning mindset and other changes, explains Valentine. “It’s not about the next sale of Apple stock anymore.”

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