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Nick Savasta takes helm of Mercury Capital's RIA after leaving firm anchored by Dell wealth

Author Dina Hampton May 7, 2018 at 12:31 PM
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Nick Savasta

Stephen Winks

Stephen Winks

October 11, 2009 — 12:22 AM

Brillant Reporting!

The 34 slide Hardy Hallcott presentation intended for major wirehouses tells the RIA community exactly what the brokerage lobby is trying to achieve. There are so many points which are counter to the best interests of the consumer and the RIA, the RIA lobby better have a strong unified voice if we expect to protect fiduciary standing as informed by ERISA and UPIA.

In a quick read these are the points the RIA community must counter, the facts are on our side—but we need to the make the arguement and not roll over:
1. The Obama/Geitner Proposal advances a higher standard which can not be modified by disclosure or client consent which would only apply when advice is provided. This supports the RIA’s position, yet Mr. Hallcott adds, if advice is provided, “fiduciary duty is not imposed.” This is a very tortured legal interpretation, as from the perspective of the RIA, advice is synonous with fiduciary standing. This sort of legal calculus which maintains “up” is “down” requires more than just the insistence of the advisor that that is not the case. We must have counsel familiar with and which can refute such legal tactics. Otherwise we are toast.
2. Hallcott confirms Wall Street’s lobbying objectives; a. Disclosure and client consent in effect waive fiduciary duty. b. ERISA does not apply even when brokers are dealing with Benefit Plans. c. The fiduciary standard is principles based and subject to interpretation, gutting fiduciary standing as we know it. d. Supports an SRO for advice, maintaining the SEC can not supervise it thus setting up FINRA as the SRO. e. Obama/Geitner want comprehensive reform, Wall Street wants a series of disjointed issues to be addressed, with the less controversial issues being addressed first in a hope to run out the clock, rather than treating reform suggested by Obama/Geitner as a whole. f. The House Financial Services Committee will have a reform bill out of committee by the end of 2009. g. The Senate BankingCommittee at the earliest will have a bill out of committee until sometime in 2010. Thus, there is a very real sense of urgency for the RIA community to to be ready for a fight. This is it. h. It is unusual that controversial legslation is passed in an election year, but another scandle will change that. This means we might have to be ready for the long haul.

If you are as passionate about fiduciary standing as I am, we need to find and advocate that is bigger than we are as interested individuals and organize behind him. Duane Thompson and/or Don Trone seem the most articulate. Hopefully they will take on this challenge that will shape the course of advisory services against very formidable advocates on the brokerage side.


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