Registered Reps, B-D's, Dropping Your Securites License

[xrac]

Because so many RR have dropped their license and were using EIA as a vehcile of choice was the reason that FINRA and the BD's were making the power grab to take over regulation of EIAs. They are losing Reps and revenue.
- - - - - - - - - - - - - - - - - -
Compliance requirements are odious and sometimes down right stupid.

OBAs - Recurring Trap for the Good (but Unsuspecting) Rep : New Jersey Law Blog

The RR knew the rules and his supervisor knew the rules and the firm knew about the activity. It just didn't get recorded on the disclosure evidently through bad advice or faulty interpretation. In this case the rules were not about protecting the client but about the FINRA rules and bureaucratic power nothing else. In most situations in life there is the principle of "no harm no foul" but not with FINRA. This guy got fined $5,000 for what? People commit assault and battery in our society and don't get fined more than that. Why do you think so many registered reps are giving up the 6 & 7 and becoming RIA. FINRA and the B/D's are losing reps everyday and they would like to extend their kingdom to us so that we all have to bow to them.

 

[VolAgent]

Correct, but stupid rulings like that from FINRA only reinforce RRs desire to drop their license and get away from the regulation.

Instead, FINRA and the SEC insist on creating even more rules to chase away RRs. The recent attempt to reduce 12b-1 fees is a perfect example. Get rid of them, and the middle class investor is who gets hurt.

 

[annuityseller]

I gave up my 6/63 4 years ago, and when on to make much more money with out compliance crap, I have since got my 65 and was an IAR for 1 year and then set up my own RIA firm. no one here has mentioned the next big trouble Source of funds,cause if you tell some one to move the money from a security product you had better have the right license??just my 2 cents

 

[BNTRS]

I gave up my 6/63 4 years ago, and when on to make much more money with out compliance crap, I have since got my 65 and was an IAR for 1 year and then set up my own RIA firm. no one here has mentioned the next big trouble Source of funds,cause if you tell some one to move the money from a security product you had better have the right license??just my 2 cents

This has been an issue with the securities industry for years, moving funds from an investment product to an insurance product without being licensed to sell securities. Just more proof that there is no such thing as a "financial advisor" just people who compete over what they think is the better idea.

 

[Norwayguy]

This has been an issue with the securities industry for years, moving funds from an investment product to an insurance product without being licensed to sell securities. Just more proof that there is no such thing as a "financial advisor" just people who compete over what they think is the better idea.

Question. Would FINRA has the same source of funds issues if a Wirehouse rep without a Life License recommended moving money from a Fixed Annuity to any security product? Yes I know a lot of people hold life licenses and don't use them.

 

[Mac1958]

I'm 7/65 - Yes, compliance can be an annoyance, but it's worth it to be able to offer a wide range of securities to best match the needs of the client. If an FIA is called for, great. VA, great. REIT, ETF, you bet. 1000 shares of GOOG, I'm there. Personally, I don't think that cramming someone into an FIA because that's the closest thing to a security that you can offer is always going to be in the best interest of the client.

We're dealing with people's lives, life savings, retirement, family, security and legacy here. That kind of responsibility shouldn't be easy.

.

 

[scagnt83]

I'm 7/65 - Yes, compliance can be an annoyance, but it's worth it to be able to offer a wide range of securities to best match the needs of the client. If an FIA is called for, great. VA, great. REIT, ETF, you bet. 1000 shares of GOOG, I'm there. Personally, I don't think that cramming someone into an FIA because that's the closest thing to a security that you can offer is always going to be in the best interest of the client.

We're dealing with people's lives, life savings, retirement, family, security and legacy here. That kind of responsibility shouldn't be easy.

.

Summed up very nicely.

If you arent prepared to be liscensed, then from an ethical standpoint you should be prepared to pass up or hand off a certain amount of business.

If somehow you never happen upon a prospect that needs something other than a FIA/SPIA/FA, then you are turning a blind eye; plain and simple.

Compliance sucks, but its worth dealing with it to have a comprehensive platform to help solve clients problems.

When your income is not restricted to just a few products, its amazing how your mindset about retirement planning changes...

 

[Larry Tew]

I'm 7/65 - Yes, compliance can be an annoyance, but it's worth it to be able to offer a wide range of securities to best match the needs of the client. If an FIA is called for, great. VA, great. REIT, ETF, you bet. 1000 shares of GOOG, I'm there. Personally, I don't think that cramming someone into an FIA because that's the closest thing to a security that you can offer is always going to be in the best interest of the client.

We're dealing with people's lives, life savings, retirement, family, security and legacy here. That kind of responsibility shouldn't be easy.

.

In 30 years I've seen plenty of people crammed into securities just because that's what the guy they were talking to happened to be selling. FINRA and the NASD before them have completely gone off the reservation. And yet with all the compliance and email monitoring and blotters and reams of paperwork and new account forms and firm element and field audits and prior materials approvals and web site oversight and needing to know if I serve on my homeowners association board and whether I coach a little baseball team and all the rest... has done NOTHING to protect consumers from bad securities salesmen. What it HAS done is to drive many good people out of the securities industry.

Madoff should have been caught several times, but the compliance investigators were too busy asking some schlub why he didn't forward an email to their supervising principal.

You can no more legislate ethical business practices than you can morality.

 

[bluemarlin08]

Dropped 7/63 in 1993. Never regretted the decision.

 

[xrac]

In 30 years I've seen plenty of people crammed into securities just because that's what the guy they were talking to happened to be selling. FINRA and the NASD before them have completely gone off the reservation. And yet with all the compliance and email monitoring and blotters and reams of paperwork and new account forms and firm element and field audits and prior materials approvals and web site oversight and needing to know if I serve on my homeowners association board and whether I coach a little baseball team and all the rest... has done NOTHING to protect consumers from bad securities salesmen. What it HAS done is to drive many good people out of the securities industry.

Madoff should have been caught several times, but the compliance investigators were too busy asking some schlub why he didn't forward an email to their supervising principal.

You can no more legislate ethical business practices than you can morality.

Well said!