Archive for June, 2012

Pursuing Practice Excellence: The Adviser Perspective

Thursday, June 14th, 2012

This month, Investment Advisor magazine included the results of a six month study performed by Investment Advisor Group and ActiFi Inc. on advisor practice management. The goal of the research was to assess the current state of practice management, identify best practices among advisors and their partners, and discover advisors’ key unmet needs as well as their future challenges and opportunities. The findings showed that practice management is viewed as a key part of the value proposition that advisors are looking for from the financial institutions that service them. In fact, nearly two-thirds (64.2) of respondents rated practice management services as either critical or very critical to their relationship with their partners. In this regard, broker-dealers emerged as the clear leader in not only providing services to advisors but in creating value.

In addition, respondents of the survey listed sales and marketing as the most important practice management solutions offered. In particular, enhancing prospecting and client acquisition skills, improving client communications and improving asset gathering skills were at the top of the list. When it came to receiving practice management services, most advisors responded that they want advice and best practices tailored to their needs and wanted someone to assist them in implementing improvements. Finally, when it came to how and where to devote resources, advisors said that going forward, they would devote significant new investment dollars to sales and marketing, while advisor time spent would be most weighted towards client service.

This study was the first in a three-report series. The second and third installations will appear in July and August issues of Investment Advisor magazine.

 

Pursuing Practice Excellence: The Adviser Perspective

Thursday, June 14th, 2012

This month, Investment Advisor magazine included the results of a six month study performed by Investment Advisor Group and ActiFi Inc. on advisor practice management. The goal of the research was to assess the current state of practice management, identify best practices among advisors and their partners, and discover advisors’ key unmet needs as well as their future challenges and opportunities. The findings showed that practice management is viewed as a key part of the value proposition that advisors are looking for from the financial institutions that service them. In fact, nearly two-thirds (64.2) of respondents rated practice management services as either critical or very critical to their relationship with their partners. In this regard, broker-dealers emerged as the clear leader in not only providing services to advisors but in creating value.

In addition, respondents of the survey listed sales and marketing as the most important practice management solutions offered. In particular, enhancing prospecting and client acquisition skills, improving client communications and improving asset gathering skills were at the top of the list. When it came to receiving practice management services, most advisors responded that they want advice and best practices tailored to their needs and wanted someone to assist them in implementing improvements. Finally, when it came to how and where to devote resources, advisors said that going forward, they would devote significant new investment dollars to sales and marketing, while advisor time spent would be most weighted towards client service.

This study was the first in a three-report series. The second and third installations will appear in July and August issues of Investment Advisor magazine.

 

Allen Stanford receives 110 years in jail

Thursday, June 14th, 2012

Multiple news sources are reporting that convicted Ponzi schemer Allen Stanford was sentenced on June 14th to 110 years in prison.  Stanford’s Ponzi scheme lasted 20 years and cost investors more than $7 billion dollars.

Stanford was convicted in March on 13 charges related to fraud, including conspiracy, wire and mail fraud charges (he was not convicted on a 14th charge).

Prosecutors had requested a sentence of 230 years; Stanford’s attorneys requested a maximum sentence of 44 months.  During sentencing, Stanford continued to deny any wrongdoing, claiming he did not run a Ponzi scheme and did not defraud investors.

Registered Rep. Magazine Drops the “Registered”

Thursday, June 14th, 2012

Registered Rep magazine announced that they have changed their name to Rep magazine, and their web address is wealthmanagement.com.

In the announcement, Editor-In-Chief David Geracioti stated that the reason for the change is obvious.  “The retail financial industry has moved on from a transactional model to an advice-based model.”

Vote on Bachus Bill Pushed Back

Tuesday, June 12th, 2012

InvestmentNews reported that voting on whether the Investment Adviser Oversight Act of 2012 should come out of the House Financial Services Committee will not be done in June, as originally anticipated.

The article quotes numerous parties as saying that any delay is a good thing as it means that there is at least something to debate, but most feel the bill will come out of committee, even if it does get changed.  Maxine Water, D-CA, has promised to introduce a measure that would authorize the SEC to charge user fees for exams.

Registered Rep. Magazine Drops the “Rep”

Tuesday, June 12th, 2012

Registered Rep magazine announced that they have changed their name to Rep magazine, and their web address is wealthmanagement.com.

In the announcement, Editor-In-Chief David Geracioti stated that the reason for the change is obvious.  “The retail financial industry has moved on from a transactional model to an advice-based model.”

SEC Extends RIA Compliance Date for Third-Party Solicitor Provisions Under the Pay-to-Play Rule

Tuesday, June 12th, 2012

On June 8th, the U.S. Securities and Exchange Commission (SEC) extended the date on which investment advisers must comply with the ban on third-party solicitations under the Pay-to-Play Rule.  The date has been extended from June 13, 2012 until nine months after the compliance date to register as a municipal advisor, which has yet to be finalized.

Adopted as part of the original Pay-to-Play Rule on July 1, 2010, the relevant provision prohibits an investment adviser and its covered associates from providing compensation to any third party for a solicitation of advisory business from a government entity, unless the referring party is an SEC registered investment adviser or registered broker-dealer subject to existing Pay-to-Play restrictions.

GAO Report Critical of FINRA

Tuesday, June 12th, 2012

InvestmentNews recently reported on another government watchdog agency criticizing FINRA.  In a recent report released by the Government Accountability Office, Congress’ investigative arm, the SEC was called upon to strengthen its oversight of FINRA.  The report said FINRA should conduct retrospective reviews of its rules to determine whether they are effective.  The report also noted that historically, the “SEC has conducted limited or no oversight of other aspects of FINRA’s operations, such as governance and executive compensation.”  The SEC, though, indicated that OCIE is reviewing FINRA’s executive compensation and governance practices.  Not surprisingly, FINRA disagreed with parts of the report and believes the oversight it receives from the SEC is strong.  However, FINRA did agree with the GAO regarding the value derived from reviewing its rules and said it would “work with the SEC to implement such a process.”

Advisors More Focused on Risk, Compliance Then Client Service

Friday, June 8th, 2012

In an article posted on Financial Planning.com, Fidelity recently conducted a survey of its advisor clients.  From the results, these advisors indicated they are spending 73% more time and resources on risk and compliance then in the past.

The survey also indicated that the respondents are spending 19% less time on new busienss development activities and 10% less time on cleint service activities then in the past.

Lawyer Receives Longest-Ever Sentence for Insider Trading

Friday, June 8th, 2012

According to an article in Compliance Week, Matthew Kluger has been sentenced to 12 years in prison for insider trading (one year longer than Raj Rajaratnam), making this the longest sentence ever given for insider trading.

Unlike Rajaratnam, who went to trial, Kluger pled guilty.  He also expressed his regret for his actions (which Rajaratnam has never done). After hearing the sentence, Kluger said ” “I guess it’s better to take $68 million and go to trial and be unwilling to accept responsibility for what you did.”

According to the article, U.S. District Judge Katharine Hayden said that “insider trading allows greedy, arrogant people to make money off others” and found that Kluger was “amoral” and “thuggish.” Another member of the insider trading scheme received 9 years in prison (although the article says that this individual, Garrett Bauer, made 30 times more profit than Kluger).

As can be expected, Kluger intends to appeal the sentence, saying the sentence is overly harsh since he made less than $1 million from his actions.