How RIA forces squashed the Bachus bill by calling the implicit FINRA bluff
Faced with the threat of more SEC exams and higher fees to pay for them, RIA leaders said in effect: Bring it on
James W. Byrd
This is good news – for now. However, we must not forget that they have an unlimited budget and many politicians and regulators in their pockets. More importantly, if we act like sheep the wolves will govern.
Honestly, we work hard at making things complex. Since Form ADV requires IAs to disclose Regulatory AUM, that is also the standared to use for user fees. Honestly, why make it complex and give everyone who wants one an exception? Cap the user fees. RAUM is simple, end of story (I apologize for my use of common sense).
Secondly, the SEC must manage its IA Program and resources. One of my clients is living an SEC Exam nightmare:
Just concluded a 11 month “limited scope desk exam” by the SFO office of the SEC. This is a firm with $200 million AUM in 5 fund of hedge funds. The firm lost $200 million in Madoff by investing with a firm with a large due diligence team that “missed” Madoff like FINRA and the SEC. There is also investor litigation against my client, and the RIA has filed suit against the Fund he invested in and Madoff (Trustee) to “get back” investor dollars.
The desk exam included a 4 hr conference call Christmas Eve last year and 4 months of 2012 additional requests.
The reward? An on site exam, 3 people for 2 weeks (for a 1 person RIA!!). They came for 2 days, left and are coming back.
If you have limited resources, is this the best use? From my client’s perspective, no. From my perspective, no.
Who isn’t being examined that should be?? Who knows.
FInally: FINRA, how about pro-active work? you allow commissions of up to 15% in Privately Traded REITS?? Really?? Is the old saying still true today: If the firm makes money, the stockbroker / registered rep makes money (aka “financial advisor”) two of three isn’t bad (note: Client not make money). Perhaps this can be revised: firm makes money, rr makes money, FINRA makes money, 3 of 4 isn’t bad!
15% commission!? WOW. No wonder I have helped a couple investors this year process claims for sales practice violations….
1. Term limits for Congress – we need turn over and no more “career” politicians. Go home and get a real job, please.
RIA recap: Bernie Clark promises to 'be there' for coming TDA-Schwab system snafus; Fidelity gets custody win; Vanguard dishes out big tax bill to investors
Schwab RIA chief petitions for 'patience' for coming merger inconveniences but 'repapering' is no culprit; Carrie Pomerantz gets Schwab board seat; Addepar wins $65 billion AUM contract.
November 3, 2022 at 1:59 AM
Fidelity lands RIA whisperer from Schwab in a coup, apparently using quality-of-life perks as lure
Kelly Smith chose the Boston rival for greater flexibility, better pay and a chance to move upmarket to sell family office services to RIAs that mix with the ultra-high-net-worth elite.
February 10, 2023 at 3:39 AM
Charles Schwab prunes another 200 or so staff but assures Wall Street analysts the Jenga piece of TD Ameritrade RIA services is still part of the puzzle post-merger
The Westlake, Tex., broker deemed John Tovar 'best talent,' hence a keeper, and ex-TD staffers affirm Schwab's good instincts.
February 11, 2021 at 12:08 AM
Skip Schweiss exit from TD Ameritrade means the RIA custody business lost its most visible corporate-paid advocate -- for the moment
TD's now ex-managing director of advisor advocacy is set to become the FPA president, but most peers agree the 58-year-old is poised to 'write his ticket' with another custodian or national RIA
August 5, 2020 at 9:33 PM
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