Archive for December, 2013

Brian Hamburger on LPL Financial’s New RIA Driven Direction @RIABiz

Thursday, December 19th, 2013

LPL Financial is making a move to service pure RIAs, putting them in competition with custodians such as Schwab and Fidelity. Over the past few months, LPL has launched RIA Compliance ADVantage and held its first RIA ADVocate Symposium. Brian Hamburger offers his thoughts on LPL’s move into a new market:

“LPL is trying to straddle the line,” says Brian Hamburger, founder of MarketCounsel LLC. “They’ve developed an overwhelming value proposition to the traditional LPL advisor who is looking to go further independent. I think they’re building a comfortable home for those advisors who are considering becoming independent but don’t have the luxury of going fee-only.”

Hamburger doesn’t foresee LPL ever dropping its emphasis on hybrid advisors as part of its niche and brand. “I think their focus is on that hybrid advisor and I think that’s where they’re going to be winning deals. I think they’re preparing for a time in the future where they may have a value proposition for the fee-only advisor. But, it’s the hybrid advisor they’ve set their sights on.”

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#MSUM13 Took Over Las Vegas in True MarketCounsel Spirit @RIABiz

Monday, December 16th, 2013

RIABiz dubbed Brian Hamburger “Mr. Las Vegas” this past week, bringing together more than 400 industry advisors, consultants, experts and executives at the 6th Annual MarketCounsel Summit.  The conference highlighted the latest trends and developments in the industry, with noteworthy topics such as succession, tuck-ins, technology and social media.

And, in keeping with the true spirit of MarketCounsel, an RIA was actually formed in front of attendees:

Brian Hamburger presided over a document-signing session for a brand new RIA that was formed right there on the spot. Attendees cheered, champagne was toasted and there were very few dry eyes in the room as many advisors reflected back to when they began as an RIA startup.

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Dodd and Frank’s reunite to discuss legislation #MSUM13 @newsfromIN

Thursday, December 12th, 2013

Sen. Christopher Dodd and Rep. Barney Frank reunited at the MarketCounsel Summit in their keynote address Wednesday morning, defending their legislation. According to InvestmentNews, the conversation avoided regulatory topics directly concerning investment advisers, includings efforts to “harmonize the professional standards and regulations between industry-regulated broker-dealers and government-regulated investment advisers.”

Mr. Dodd said that “candidly” it was an issue with a lot of tension. “It was one of those subject matters that we weren’t able to address,” he said.

“It got crowded out,” Mr. Frank said. “That issue could not successfully compete for our attention with systemic risk,” and the perception that large financial institutions would need to be subsidized in a crisis or pose a threat to the broader economy, he said.

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Dodd and Frank defend their law at #MSUM13 @FAmagazine

Thursday, December 12th, 2013

On December 11 at the MarketCounsel Summit, Sen. Christopher Dodd and Rep. Barney Frank came together for the first time on stage to discuss and defend their historic Dodd-Frank Wall Street Reform and Consumer Protection Act.  Some memorable takeaways from the conversation:

“People have been declaring Armageddon and coming up with doomsday scenarios in all of this,” Dodd said. “My experience has been that institutions manage just fine.”

“I sometimes feel we have more confidence in the free market than the [industry] people out there,” said Frank.

The industry should “give a chance for the regulations to work a bit, and I think over the next three years that will be case,” [Dodd] said. “That will give us a chance to settle in and see what’s working or not working…. I’m quite confident that a future Congress will look at this and ask if it’s working right and make improvements.”

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#MSUM13 kicks off with Brian Hamburger firing questions at his execs @RIABiz

Wednesday, December 11th, 2013

The MarketCounsel Summit kicks off with it’s own President and CEO, Brian Hamburger, firing questions at his executive panel. While many opinions and ideas were shared, Sharron Ash’s remarks seemed to really stick with Brooke Southall, RIABiz:

MarketCounsel’s chief litgation attorney, Sharon Ash, stated flatly that the Broker Protocol is endangered by the fact that even one wirehouse pulling out could deal a crippling blow. “It’s voluntary. So how do you amend it?” she asked.

Ash also commented on a rash of SEC actions that resulted in settlements. She points out the obvious upside — and downside.

“You hope that it has a chilling effect,” she says.“The loss is that these are quick and it just comes down to a business decision on the part of the advisor. So while there’s a lots of fanfare, there’s no meat on it.”

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Can’t make it to #MSUM13? Join us virtually for a session hosted by @BrightTALK!

Friday, December 6th, 2013

If you can’t make it to the MarketCounsel Summit next week, you will be missed… but that doesn’t mean you can’t have a little taste of the excitement. BrightTALK will be streaming “Acapella: Finding True Harmony to Preserve Independent Investment Advice” on December 11 at 2:50PM PT.

Acapella features industry leaders Ron Rhoades, Skip Schweiss, David Tittsworth, and MarketCounsel’s own President and CEO, Brian Hamburger.

To learn more about the session and the Summit, click here. To register for the session, click here.

Listen to the December 2013 #AdviserSquawkBox… Out Now!

Friday, December 6th, 2013

The MarketCounsel Adviser Squawk Box is a monthly podcast program providing a “seat in the office” as MarketCounsel’s own Brian Hamburger and Dan Bernstein review the past month’s most pertinent developments affecting investment advisers.  During this month’s program, Dan and Brian discuss:

  • Adviser and its CCO Charged with Principal Transaction and Custody Violations;
  • Investor Advisory Committee Pushes SEC on Fiduciary Harmonization and User Fees… and the SEC Doesn’t Care; and
  • Red Flags Rule Goes into Effect for Investment Advisers.

Brian Hamburger Looks Ahead to 2014 Compliance Trends @ByAllAccounts

Wednesday, December 4th, 2013

ByAllAccounts’ whitepaper, “15 Compliance Trends that Will Impact Your Practice in 2014,” features Brian Hamburger looking ahead to what 2014 will bring forth. Covered in this paper are pressing topics such as:

  • Why the SEC will be more aggressive in the year ahead
  • What emerging regulatory risks may come to the forefront in 2014
  • How technology is helping advisors remain compliant while making regulators smarter
  • What (under-reported) success story is changing the advisory (and compliance) landscape

To download the whitepaper, click here.

Another State Enacts Law to Protect Employee Social Media Accounts

Tuesday, December 3rd, 2013

A New Jersey law recently became effective which limits an employer’s ability to require or request a current or prospective employee to provide or disclose any user name or password to a personal social media account.  The law had bipartisan support.

Many states have enacted similar laws.  The public has generally been supportive of protecting the privacy of employees and prospective employees.  The key for investment advisers is the details regarding what communications are protected and any exclusions available for compliance purposes.

For an investment adviser to allow its employees to use social media, the firm must be able to supervise and retain business communications.  Some states, such as Maryland, have recognized that certain employers have regulatory requirements that require them to attain access to social media accounts.  Other states, however, have decided that the need for privacy protection outweighs the regulatory burden to employers such as investment advisers and broker-dealers.  California, for example, specifically considered the issue and decided not to provide any exclusions for regulated entities.

New Jersey has joined the Maryland camp and provided investment advisers with the ability to use social media.  The New Jersey law specifically says that nothing shall be “construed to prevent an employer from complying with the requirements of State or federal statutes, rules or regulations, case law or rules of self-regulatory organizations.”  In addition, the law appears to give a more broad allowance by not preventing an employer from implementing and enforcing policies pertaining to services the employee uses for business purposes.

Like other social media laws, including California, employers are also allowed to conduct an investigation in certain circumstances where they have reason to believe that there is a legal or misconduct issue by an employee, including where an employee is transferring proprietary or confidential information.  In addition, the law does not protect communications that the employee has made public.

These laws are not specific to investment advisers, so many firms do not know they exist.  Even if you are not located in a state that has implemented one of these laws, the development is important.  State legislators tend to look to other states’ laws when creating their own.  Hopefully, laws like New Jersey’s will be followed by other states, allowing investment advisers to use social media in a compliant way.

SEC Calls Fiduciary Duty a Long-Term Action

Tuesday, December 3rd, 2013

The SEC’s regulatory outlook for 2014 was released by the Office of Management and Budget.  The publication covers the SEC’s regulatory agenda that included 43 items.  The SEC does not give a specific time frame for movement on the agenda items, but instead gives them a priority description.  The fiduciary harmonization was listed as a “long-term action” which is behind “proposed-rule stage” and “final-rule stage” initiatives.  In 2013, the harmonization was listed as a similar “pre-rule stage” item.

This lack of urgency comes despite the Investor Advisory Committee’s recommendation that the SEC move forward with a fiduciary standard for broker-dealers providing investment advice.  With this characterization, and the typical speed of rule releases, it would seem improbable that the SEC will move aggressively on harmonization.  It is also worth noting, that even if the SEC proposes any rule changes, it will be a long time before any final rules are in place.  There will most likely be long comment periods, significant analysis by the SEC, and finally a long compliance date for any changes.