At FSI's largest conference ever, regulatory changes dominated the discussion

February 3, 2011 — 1:49 PM UTC by Elizabeth MacBride

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The FSI’s OneVoice conference was my first immersion in the world of independent broker-dealers – and I found a lot that’s striking about the IBD world at this particular moment of political and regulatory upheaval. I’ll write more about that tomorrow. Changes in the regulatory environment dominated the conference, as clear from the thoughts that attendees sent for this eavesdropping piece. Attendees were curious about the changes, and perhaps somewhat downbeat; the final speaker, Peter Sheahan, author and CEO, Change Labs, changed the energy of the crowd, spurring people to consider how to take advantage of the fiduciary standard. See: Groundbreaking SEC study would smash old regulatory system, creating fiduciary brokers and more regulated advisors.

The fact that struck me among all the sessions I attended was one that Chip Roame, managing principal of Tiburon [Calif.] Strategic Advisors, pointed out: in the past decade the number of advisors – front-line people serving clients – has not changed. Cerulli data puts that number at 396,000; Roame said it was higher – but regardless, the fact that it hasn’t changed gave me pause for thought.

It suggests to me that the industry as a whole has not done enough work to expand the market.

Roame laughingly told his crowd he’d been reading Elmo just a few minutes before beginning his talk. He’d brought his two-and-a-half-year-old to the conference. As a working parent myself, I am always heartened to see other people finding creative ways to mesh their careers and family lives.

Here are some other thoughts from the other 580-plus attendees at the conference in Phoenix, which ran from Monday evening through Wednesday at the Sheraton.

Dale Brown, CEO, FSI

The buzz started at the opening general session with Rick Ketchum, CEO of FINRA. During my conversation with Rick and the Q&A that followed with attendees, we got some clarity and perspective about where independent broker-dealers and independent financial advisors fit as it relates to Dodd-Frank.

With the help of FSI members, FSI has taken its place at the proverbial table in Washington. FSI is a catalyst for members to take action and our voices are being heard. That buzz continued in the exhibit hall and educational sessions.

As we approached the closing general session, there was an optimism amongst attendees about our industry. And, Peter Sheahan’s remarks during the closing general session helped us to fully realize our opportunity, and how we should take this small window of opportunity to innovate, collaborate and reshape financial advice for the future.

Barnaby Grist, executive vice president, wealth management, Cetera Financial Group

The most compelling moment for me was when an industry veteran announced her retirement at a sponsor dinner. She said, quite simply, that with all the new regulations, the business just isn’t fun anymore. This speaks to the times we’re in, particularly for the smaller and midsize broker dealer. Given the trifecta of low interest rates, increasing regulatory pressure and stories of private placements gone awry, smaller and midsize broker dealers are looking for more support.

Jodee Brubaker-Rager, chief compliance and operations officer, Geneos Wealth Management Inc.

I attended all of the educational sessions on the compliance track and found the session “Inside the Regulatory Mind” with the regulatory panel to be the most informative session of the four I attended. The panel presented some fresh information that I haven’t already been reading about for the past several months and they were very open with the audience in answering our questions. Peter Sheahan’s general session was outstanding! He was energetic and sounded very knowledgeable about the industry, specifically the independent model. I appreciated how he encouraged the audience to embrace the new regulation and use it to our advantage.

This morning I attended the Compliance discussion group, which was the most informative time I spent at the conference. Sharing ideas about the implementation of some new important rule changes – there was a lot to talk about and I came away with some great ideas.

(For the story of how Geneos landed a former Royal Alliance broker, see: Why a Royal Alliance champion gave up the cause after AIG made changes.)

Eric Cott, director of FA Education, The Options Industry Council

I found the session, “Trust vs. Sophistication: What’s A Wealth Manager to Do?” educational and well attended. I also appreciated the opportunity to ask questions regarding the treatment of equity options as an alternative investment and the challenges facing advisors at their respective firms. It was great when advisors stopped by the booth telling us they attended that panel and were interested in more information about how options could fit into their client’s portfolios.


Mentioned in this article:

Cetera Financial Group
RIA-Friendly Broker-Dealer
Top Executive: Larry Roth

The Options Industry Council (OIC)

Top Executive: Eric Cott



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