Archive for February, 2014

Brian Hamburger on Effecting Change as a NextGen Advisor @RIABiz

Thursday, February 27th, 2014

Justin Richter, a 32-year-old advisor has moved between three different firms over the past 1o years. This quick turnaround may seem strange to an older generation of advisors, but Brian Hamburger uncovers the underlying truth about the younger generation:

Brian Hamburger, founder of MarketCounsel, argues that while older advisors tend to be at one firm for years, if not decades, younger advisors are eager to move around until they find the best fit.

“It’s a generational issue,” he says. “Young people don’t see turnover the same. They tend to think that sometimes you need to actually move to affect change.”

Hamburger says “multiple moves close on each other’s heels are ‘much more common’ than they used to be, especially with younger advisors.”

Additionally, Brian identifies a new ease of getting a strategic message out to clients about these moves:

“If they message it right, the clients will follow,” he says. “We’re seeing it in record numbers.”

“It’s all in the way advisors message themselves. Younger advisors — as opposed to old-school wirehouse guys — are more like to get across to their clients that ‘I’m your guy, regardless of what firm I’m at,’” says Hamburger. The shift away from a wirehouse mentality has an added benefit for the traveling advisor. “Ten years ago,” says Hamburger, “if an advisor was going from one wirehouse to another, clients generally knew or suspected that it was because of compensation. Now, there’s a sense that the move might be prompted, at least in part, because it’s in their best interest. That’s much more effective messaging.”

“Now, you can talk about the fact that you moved to a new firm on social media or on your blog. You can update your LinkedIn and your connections will see that change.”

“There’s a number of different ways you can announce it to the world,” says Hamburger.

Click here to read more.

Brian Hamburger on Effecting Change as a NextGen Advisor @RIABiz

Thursday, February 27th, 2014

Justin Richter, a 32-year-old advisor has moved between three different firms over the past 1o years. This quick turnaround may seem strange to an older generation of advisors, but Brian Hamburger uncovers the underlying truth about the younger generation:

Brian Hamburger, founder of MarketCounsel, argues that while older advisors tend to be at one firm for years, if not decades, younger advisors are eager to move around until they find the best fit.

“It’s a generational issue,” he says. “Young people don’t see turnover the same. They tend to think that sometimes you need to actually move to affect change.”

Hamburger says “multiple moves close on each other’s heels are ‘much more common’ than they used to be, especially with younger advisors.”

Additionally, Brian identifies a new ease of getting a strategic message out to clients about these moves:

“If they message it right, the clients will follow,” he says. “We’re seeing it in record numbers.”

“It’s all in the way advisors message themselves. Younger advisors — as opposed to old-school wirehouse guys — are more like to get across to their clients that ‘I’m your guy, regardless of what firm I’m at,’” says Hamburger. The shift away from a wirehouse mentality has an added benefit for the traveling advisor. “Ten years ago,” says Hamburger, “if an advisor was going from one wirehouse to another, clients generally knew or suspected that it was because of compensation. Now, there’s a sense that the move might be prompted, at least in part, because it’s in their best interest. That’s much more effective messaging.”

“Now, you can talk about the fact that you moved to a new firm on social media or on your blog. You can update your LinkedIn and your connections will see that change.”

“There’s a number of different ways you can announce it to the world,” says Hamburger.

Click here to read more.

Brian Hamburger Talks Faux Independence @RIABiz

Thursday, February 20th, 2014

The new @ConcentusWealth, formerly known as Strid Wealth Management Group has broken away from @WellsFargo and brought its assets to @Schwab4RIAs with the help of @DynastyFP.  Brian Hamburger was consulted by @RIABiz regarding the @WellsFargo Profit-Formula program, and here’s what he had to say:

“A fair number of advisors have come to a similar conclusion about the not-so-much independent nature of the Wells Fargo program and have turned toward the RIA model,” according to Brian Hamburger, principal of MarketCounsel.

“In pretty large numbers we hear from these guys. [Wells Fargo] sold clients on the benefits of independence but the don’t really have the platform.”

Click here to read more.

Corey Kupfer Talks Adviser Splits with @newsfromIN

Thursday, February 20th, 2014

There are many different reasons adviser teams choose to stop going at it together, but one thing is for sure: breaking up can be hard on advisers, employees and clients alike. Corey Kupfer sat down to share his experience on what can happen when, and why some partnerships end:

“[Clients] could be asked to report to a judge or mediator about when a departing adviser first contacted them,” according to Corey Kupfer, director of entrepreneur services for MarketCounsel.

“Some situations build to spectacular blowouts between partners that lead to separation, but most advisers split up because they have different business goals or personal ambitions that can’t be pursued within the current structure,” Mr. Kupfer said.

“In other circumstances, the partners just stop getting along,” he said.

“Sometimes people don’t really do the right type of due diligence — the cultural due diligence — that they should,” Mr. Kupfer said. “Those relationships break up pretty quickly, in about two to three years.”

Click here to read more.

Brian Hamburger Sees the Risk in Finra’s Data Analytics @newsfromIN

Thursday, February 20th, 2014

According to FINRA’s chief risk officer, Carol di Florio, FINRA is now relying on complex data analytics to target examinations for high risk violations. Additionally, FINRA has been working on a pilot program in which some firms have uploaded data prior to an examination so that examiners can identify potential problems ahead of time.  Brian Hamburger speaks about a risk in connection with regulators culling data from prepared reports as opposed to sharing data streams:

“The other risk in relying on firms to submit data is ensuring that firms are providing the regulator with a full picture of their operations,” said Brian Hamburger, chief executive of Market Counsel, a compliance consulting firm.

“Bad guys aren’t known for filing truthful reports,” Mr. Hamburger said.

Click here to read more.

SEC Formally Announces Initiative to Examine Never-Before Examined Advisers

Thursday, February 20th, 2014

The SEC formally announced what it has talked about for at least four months now, an initiative to examine those advisers that have been registered for more than three years that have never been examined.  SEC staff has been discussing this initiative at public appearances, including CCO Outreach programs, and it was listed on the OCIE 2014 priorities release.

These examinations will concentrate on the advisers’ compliance programs, filings and disclosure, marketing, portfolio management, and safekeeping of client assets (custody).  The SEC has said that each region will determine the specific examination procedures, so the process may vary nationally.  A copy of a letter the SEC will send to advisers that are subject to the initiatives can be found here.

SEC Issues No-Action Guidance for Certain “Knowledgeable Employees” of Private Funds

Wednesday, February 19th, 2014

The Managed Funds Association (the “MFA”) received no-action guidance from the SEC regarding the definition of “knowledgeable employee” in rule 3c-5 under the Investment Company Act of 1940.

Rule 3c-5 permits a “knowledgeable employee” of a private fund or affiliated person that manages the private fund, to invest without being counted for purposes of the 100 person limit in section 3(c)(1).  That person can also invest in a section 3(c)(7) fund regardless of being a “qualified purchaser.”

Rule 3c-5 defines the term “Executive Officer” (which qualifies as a knowledgeable employee) as the “president, any vice president in charge of a principal business unit, division or function… any other officer who performs a policy-making function, or any other person who performs similar policy-making functions” for the private fund or its manager.

The MFA asked for confirmation that: i) the principal status of a unit, division, or function depends on the relevant facts and circumstances of a particular investment manager’s business operations; ii) several business units, divisions, or functions within an investment manager may each be considered a principal unit, division, or function; and iii) the unit, division, or function need not be part of the investment activities of a private fund to be considered a principal unit, division, or function.

The SEC responded by saying it believes the rule provides flexibility regarding the knowledgeable employee definition and confirmed the requested guidance.  The SEC gave further guidance, including confirming certain examples proposed in the requesting letter.  The full letter can be found here.

FINRA Moving Forward With New Initiatives

Thursday, February 13th, 2014

InvestmentNews reported on the discussions that took place at FINRA’s recent board meeting.  The board of governors discussed several rules proposals, with the following actions:

  • Authorizing FINRA to seek comment on a proposal to require firms to include a reference and link to BrokerCheck on any FINRA member’s publicly available website.
  • Authorizing FINRA to file proposed amendments with the SEC reorganizing the definitions of “public” and “nonpublic” arbitrator.
  • Authorizing FINRA to file a proposed Rule 2081 with the SEC which prohibits firms from “condition[ing] settlement of a dispute with a customer on, or otherwise compensating the customer for, the customer’s agreement to consent to, or not to oppose, the firm’s or associated person’s request to expunge the customer dispute information from FINRA’s Central Registration Depository system.”
  • Authorizing FINRA to file with the SEC proposed amendments to Rule Series 9800 that would amend the temporary cease and desist order process.

Listen to the February 2014 #AdviserSquawkBox… Out Now!

Monday, February 10th, 2014

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:

  • Key Lessons from the SEC’s 2014 Examination Priorities and CCO Outreach Program;
  • SEC Gets Small Budget Increase; and
  • No-Action Relief Given to M&A Broker From Registering as Broker-Dealer.

http://cnsl.me/1gUsuqb

MarketCounsel Leads Another Wirehouse Team to Independence @RIABiz along with @FocusFinancial and @diamondconsults

Friday, February 7th, 2014

Clayton Hartman, formerly with UBS, made a clean breakaway with his $1-billion team to form the RIA, IFM Capital Advisors. Advocate for independence, MarketCounsel was a key player in assisting with this transition, among keeping the move under wraps:

“IFM used Brian Hamburger and his MarketCounsel team as legal counsel for the transition and he said he got “the talk” about the importance of confidentiality and didn’t mess around with it. Hamburger gave anecdotes about how some would-be breakaways got drawn and quartered by wirehouses when they failed to keep the secret in this article: Deal killers for almost-breakaway brokers.”

Click here to read more.