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Broker-Dealers
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Lincoln Financial Advisor Defamation Case Highlights The Limitations Of Brokercheck |
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Monday, April 16, 2012 14:18
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Tags: FINRA | investment advisors Conflicting stories about a former rep that are now costing Lincoln Financial $2 million, but there's no trace of them in FINRA's publicly accessible database. That's probably a good thing.
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Jeffrey Concepcion managed Lincoln's Columbus and Cleveland offices until 2006, when negotiations to syndicate the firm's products stagnated and he was let go.
The controversy centers around why the deal failed, why Concepcion's six-year tenure ended, and how Lincoln Financial explained the situation.
FINRA agrees that in telling clients that Concepcion had left the industry, the firm was defaming his character and hampering his efforts to start fresh as an independent at LPL.
Whether Lincoln Financial actually told its management team they'd fired Concepcion for cause while shrugging publicly to customers, there's no trace left on his Brokercheck record.
The file doesn't disclose any events at all. No disciplinary action, no termination for cause or otherwise.
Prospective clients trying to research Concepcion's career won't find any sign of the controversy in his official profiles with either FINRA or the SEC. That's a good thing.
But if they tried to track him down and were told verbally that he'd quit the business, would they have bothered to check with the regulators and find his new DBA?
Probably not. And in that scenario, even if Lincoln Financial kept Concepcion's Brokercheck record scrupulously clean, it wouldn't have achieved the purpose here.
Brokercheck and its SEC equivalent have yet to become the source of first and last resort for researching advisors. Retail investors need to learn to check these pages first and to verify all clais against them.
Until they do, it's nice if an advisor's page is accurate, but gossip and accounts published elsewhere can still damage his or her reputation.
That's apparently what happened here, and it's why FINRA has awarded Concepcion $2 million for defamation.
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Long-Time Independent Advisor Goes The Other Way, Joins Ameriprise |
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Friday, April 13, 2012 12:21
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Tags: breakaway brokers | regulation After being on his own since the early 1980s, a Texas advisor has gone back to the employee model. The motives are simple: compliance and technology.
If you're a private wealth advisor, please join Advisors4Advisors (A4A) to get its full benefits. Register now, and we will donate $20 of our $60 membership fee to Bubbles The Clown’s financial literacy program, and you can post an icon on your website saying you support Bubbles' 501(c)3 charitable organization. Plus, get other membership benefits, including: - Analysis daily of issues affecting advisors
- Aggregation of news from dozens of sites targeting wealth managers
- Reviews by advisors of practice management applications
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Charles Hart of Plano is now one of over 60 Ameriprise advisors who operate in five branch offices in the city.
He just got onto the broker-dealer's website, but with $114 million in client assets already under his belt after 30 years, he's got a little breathing room before he has to prospect aggressively.
However, Hart didn't come to Ameriprise for the marketing power of the brand.
He says the regulatory burden of operating as an independent had gotten so serious that he would have needed to hire his own compliance officer to keep up.
Based on his BrokerCheck profile, it looks like he's going to be giving up his DBA of Vision Wealth Management -- affiliation ended in March -- and his separate office in order to move in with 23 existing Ameriprise affiliates.
Only he can say how much a compliance officer would have cost him. But those of you who've moved your offices recently know that in itself proves that this is a non-trivial decision.
Hart also says Ameriprise offered him data security and account aggregation, both of which are available to independents from third-party vendors.
He suspects he's not as much of an outlier in the industry as A4A readers may think. Keeping up with compliance really was killing him, and there are probably a lot of independents in a similar boat.
If so, we could see that the price of freedom boils down to wanting someone to tell you the rules, which is at best grim humor.
And if he's right about this kind of move becoming more common in the future, it says a lot about the state of the post-Dodd-Frank industry.
It's not so much that following the rules was devouring Hart's profit margins. It was the uncertainty and the rate at which regulations keep changing.
Having to track the twists and turns was keeping him from his clients. Now he just does his job and lets the Ameriprise compliance gurus monitor the rules.
It sounds like he's a pretty motivated and disciplined guy. Maybe all he needed was middle-term clarity on the compliance environment -- a fixed star to steer by -- and he could've done the rest himself.
Read more...
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Insurors Are Dumping Broker-Dealers Based On Economic Factors And Conflicts Of Interest |
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Friday, March 23, 2012 15:22
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Tags: annuities | broker-dealers | enterprise value
The Hartford announced this week that it may sell off its broker-dealer, Woodbury Financial Services. This is being interpreted as fallout from lower interest rates and a more educated investing public about conflicts of interest. Large insurance companies have found it harder to make money on annuities with interest rates so low. They also are feeling the increased scrutiny about manufactures owning distribution channels for their products. If you're a private wealth advisor, please join Advisors4Advisors (A4A) to get its full benefits. Register now, and we will donate $20 of our $60 membership fee to Bubbles The Clown’s financial literacy program, and you can post an icon on your website saying you support Bubbles' 501(c)3 charitable organization. Plus, get other membership benefits, including: - Analysis daily of issues affecting advisors
- Aggregation of news from dozens of sites targeting wealth managers
- Reviews by advisors of practice management applications
- 30 independent experts blogging on advisor business issues
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Investors have become more educated and experienced. They value independence and unbiased recommendations over one-stop-shop convenience. Woodbury had just become more aggressive in its recruiting and making the announcement of a possible sale with no specific buyer basically shuts that process down. It also makes advisors restless with uncertainty about their futures.
Investors in the company are also balking against the higher fees being charged for insurance products to make up for losses on the broker-dealer side. Hedge funds want to be invested in profit centers. The breakup of the company would unbundle services and throw both the broker-dealer and the insurance company back into focusing on their core businesses—life insurance and property and casualty insurance. Each would also be focused on its respective distribution channels and business strategies.
Read more...
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Talent Exodus From Large Firms Continues In 2012 |
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Thursday, March 15, 2012 14:04
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Tags: breakaway brokers | broker-dealers | RIAs
The trend for advisors leaving large financial institutions to create their own businesses is accelerating in 2012. Independent firms such as LPL and Vanguard are making concerted efforts to attract teams and solid producers from the big houses. Independents are getting creative in the process, combining aspects of service and attracting advisors with hybrid models.
LPL has teamed up with Fidelity to offer such a model, an unusual step because firms traditionally compete against each other rather than combining forces. This is yet another development in the overall going-independent trend. The big firms have been sweetening recruiting packages but this has not stopped the attraction of starting one’s own business. As independent firms have increased their capabilities and provided greater customization for advisory teams, larger teams have migrated out. As larger teams leave, other teams and advisors with significant assets are taking a look.
If you're a private wealth advisor, please join Advisors4Advisors (A4A) to get its full benefits. Register now, and we will donate $20 of our $60 membership fee to Bubbles The Clown’s financial literacy program, and you can post an icon on your website saying you support Bubbles' 501(c)3 charitable organization. Plus, get other membership benefits, including: - Analysis daily of issues affecting advisors
- Aggregation of news from dozens of sites targeting wealth managers
- Reviews by advisors of practice management applications
- 30 independent experts blogging on advisor business issues
- 24/7 access to webinars with 50 hours of CFP® CE and 100 hours of IMCA CE
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Huge Exodus At Merrill Lynch May Bode Ill for BofA |
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Tuesday, March 13, 2012 14:22
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Tags: bank of america | broker-dealers | Merrill Lynch
Merrill Lynch advisors with significant client assets have been on a departing track to other firms, especially since September 2011. The other big three—Morgan Stanley, UBS, and Wells Fargo—have also lost advisors with significant assets but have largely managed to replace them with new hires. Not so for Merrill. Advisors seem to be taking advantage of a final guaranteed stock price package based on 2002 stock prices and are also rebelling against the bank’s strong encouragement to cross-sell services and products. They also may be feeling the capital crunch Bank of America is experiencing as a result of the 2008 crisis.
Most of the advisors seem to be migrating to other firms with UBS garnering the bulk of advisors with significant client relationships. The exodus seems to be occurring regardless of location. There is no mention of how many of these advisors—or advisory teams—may be leaving to start their own firms. Regardless, parent company Bank of America expressed concern in a recent filing that advisor departures could harm its bottom line. If you're a private wealth advisor, please join Advisors4Advisors (A4A) to get its full benefits. Register now, and we will donate $20 of our $60 membership fee to Bubbles The Clown’s financial literacy program, and you can post an icon on your website saying you support Bubbles' 501(c)3 charitable organization. Plus, get other membership benefits, including: - Analysis daily of issues affecting advisors
- Aggregation of news from dozens of sites targeting wealth managers
- Reviews by advisors of practice management applications
- 30 independent experts blogging on advisor business issues
- 24/7 access to webinars with 50 hours of CFP® CE and 100 hours of IMCA CE
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