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Bruce isn’t the only independent FA whose words are worth a listen.
Others who chose business ownership with Wachovia Securities also want
you to know their stories. Where will hearing them lead you? Certainly
to our website and to an even bigger story. Why wait? Click here now.
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FEATURE STORY
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What
The Wealthy Think Of Your Firm
By John Churchill
Regardless of where you work, or what kind of practice you have, the
last nine or 10 months have probably been tough on you and your clients.
Of course, some firms have fared better than others, so what better time
than now to hear what clients think of your brand?
In mid-April, the Luxury Institute, a New York-based research
organization that tracks the opinions of the wealthiest 1 percent of
U.S. consumers, asked respondents to rate wealth-management businesses
(commercial banks, regional banks and private banks). The survey
included a total of 551 respondents over the age of 30, each with a net
worth of at least $5 million and an annual income of $200,000.
Given the sub-prime-related markdowns, in particular, and the torrent of
bad economic news in general, you would think that respondents would
view financial companies negatively. And they did: Satisfaction levels
across the board were in fact lower this year than last year. But there
was a surprise: Not all of the companies generating the worst news
received significantly lower marks from high-net-worth respondents.
Read the full story here.
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SIFMA's Independent Firms Conference will address
these cutting-edge issues: challenges in the independent model;
recruiting, retention and broker satisfaction; analysis of independent
markets; and, the business of advice. Don't miss Keynote Speaker,
William Dwyer III, Managing Director and President,
Independent Advisor Services, LPL Financial Services. Register Today!
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Top News of the Week
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LPL
Financial Heats Up The RIA World
By Halah Touryalai
Charles Schwab, Fidelity, TD Ameritrade and Pershing will soon have a
new and powerful rival to worry about, while the hybrid
broker/independent RIA model should get a major boost. The largest
independent b/d in the U.S., LPL Financial, announced today it’s going
to launch an RIA custodian later this year, which will serve both hybrid
and fee-only investment advisors who operate independent RIAs. LPL
currently has about 12,000 Series-7 advisors under its massive b/d
umbrella.
“It’s the first time a really large broker/dealer is declaring that
it’s okay to have a hybrid registration,” says Moss Adams principal,
Philip Palaveev. “In other words, they’re allowing reps to have
their own RIAs and manage assets there, and, at the same time, be
affiliated with the broker/dealer.”
Palaveev says the industry has allowed hybrid registration for a long
time, but that it’s been “hush-hush, and b/ds have been somewhat
uncomfortable with it.” In fact, about 8,000 of LPL’s own advisors
are currently dually licensed as investment advisors, but are not
permitted to operate under their own RIAs. They manage about $75 billion
in advisory assets under LPL’s corporate RIA. Now, Palaveev says, the
largest independent b/d in the market is declaring that hybrids are not
only welcome, but they can register their RIA in their own name.
Read the full story here.
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Presenting The 2008 Wealth Management Resource Guide
For more than 40 years, attorneys, bank trust officers, financial
planners and investment consultants have relied on the Trusts &
Estates Wealth Management Resource Guide as the industry's only
one-stop source of trust institutions and related products and services.
To order your copy click
here
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Banc
Of America Dishes Out $10 Million For Fiduciary Violations
By Halah Touryalai
Bank of America Corp. just got about $10 million poorer. Its
broker/dealer, Banc of America Investment Services Inc., settled charges
today that it failed to disclose that it favored mutual funds affiliated
with the firm.
The SEC alleges that from July 2002 through December 2004, Banc of
America Investment Services did not tell clients that it was favoring
two mutual funds affiliated with the firm when it was selecting
investments for discretionary mutual-fund wrap-fee accounts. It also
charged Columbia Management Advisors, a successor to Banc of America
Capital Management, LLC, with aiding and abetting, and causing certain
violations.
"BAISI's selection of mutual funds for wrap-fee clients was compromised
when it favored its own proprietary funds over non-affiliated funds,"
said Linda Chatman Thomsen, director of the SEC's Division of
Enforcement. "By using a method to select funds that was at odds with
information it provided to clients, BAISI violated its duty of loyalty
to its clients."
Read the full story here.
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FINRA
Fines American Funds
By David A. Geractioti
Every rep loves American Funds: The fund family—the nation’s
largest, with $1 trillion in assets—offers decent performance for
relatively inexpensive fees. Oh, and you won’t get fired for putting
clients in an American Fund offering. But today FINRA spanked the fund
giant for “directed brokerage,” a now-banned practice of directing
trades to the trading desks of top-selling brokerages. (Click here
for the FINRA press release and a link to the ruling.)
FINRA let a 2006 case stand that found American Funds Distributors
guilty of unfairly compensating brokerages that sold the funds. American
will have to pay a $5-million fine. FINRA says American behavior
wasn’t “egregious,” and no shareholders were harmed, but that
American nevertheless had a conflict of interest with 46 broker/dealers
in using directed brokerage. (American paid about $98 million in fees
from 2001 to 2003, FINRA says.) It should be noted that directed
brokerage was a common practice for years. This was never hidden from
regulators, and was sometimes disclosed to investors in
prospectuses—well, buried might be a more accurate description of the
disclosure. Critics have argued that in outlawing the practice, and then
fining fund companies and brokerages for a formerly accepted business
practices, regulators are “regulating by
enforcement”—or making up rules as they go along. Click here for an L.A. Times story
on the L.A.-based fund company.)
Check out our home page here.
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