More Regulation On The Way!

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May 18, 2006 8:40 pm

The following snippets were taken from a competing publication. If I post the link, this post may be pulled. PM me, if you want the name of the publication.


NASD chairman and chief executive Robert Glauber today called for extending NASD's proposed mutual fund point-of-sale disclosure form for exchange-traded funds, separately-managed accounts, and all forms of annuities.


"Let's extend it first to exchange-traded funds and separately-managed accounts. And let's also extend it, in some form, to annuities - fixed, variable and equity-indexed."


"The fact that fixed annuities are more lightly regulated than mutual funds should not be an incentive for brokers to sell them," he added.



 




 


 







 

May 18, 2006 10:12 pm
doberman:

The following snippets were taken from a competing publication. If I post the link, this post may be pulled. PM me, if you want the name of the publication.


NASD chairman and chief executive Robert Glauber today called for extending NASD's proposed mutual fund point-of-sale disclosure form for exchange-traded funds, separately-managed accounts, and all forms of annuities.


"Let's extend it first to exchange-traded funds and separately-managed accounts. And let's also extend it, in some form, to annuities - fixed, variable and equity-indexed."


"The fact that fixed annuities are more lightly regulated than mutual funds should not be an incentive for brokers to sell them," he added.



 




 


 







 




What's the proposed MF pos form look like?


May 18, 2006 10:23 pm

These things can be a real pain, but they will save your bacon when some imbecile tries to sue you.

May 19, 2006 1:53 pm
remotecontrol:

These things can be a real pain, but they will save your bacon when some imbecile tries to sue you.


That's fairly clueless, the ever increasing edicts and micro management INCREASE legal liabilities and increase costs which is why so much is flowing downstream on production.


The new broker dealer doesn't focus on positive production issues (like more business) they reinvent themselves as the regulators friend and pit themselves against their producers and in fact clients where all this excess cost must be absorbed. Part of this is flat period for the advice dealers who keep losing to RIA models as well. They're lobbying hard to force that business back as well.


You should take your brain off "remote".




May 19, 2006 7:43 pm

mikebutler222 

What's the proposed MF pos form look like?

----------------------------------


The article mentioned it was two pages and (from its description) was more detailed than Morningstar Reports, especially about fees and expenses. The article also went on to say that he was vague on when he was going to present the idea to the board.


My guess is that right after the next "good, old-fashioned market correction" we'll see these changes enacted.

May 21, 2006 9:13 am

I don't think they are worth the paper that they are written on. Waste of

time and energy for us and the client.

May 21, 2006 9:51 am

Like it or not, regulators are political animals, and as such will do ANYTHING that will bring them to the attention of the greatest number of (preferrably uninformed) masses.  This, of course, includes throwing the most visible embodiment of the perceived evil (us) under the bus.


Ask youself why Elliot Spitzer didn't go after investors to pay higher fees when the makets exploded during the late '90s?  After all, they were making boatloads of money.


Truly, nothing is going to improve (indeed, the deterioration of opur industry will accelerate) until we have an SRO that represents investors and brokers fairly and equally.

May 21, 2006 10:06 am

Its not a metter of paying fees, its a matter of knowing you are paying
fees.  Most investors do not know what they are paying and that is
simply wrong.

May 21, 2006 3:31 pm

I agree it's wrong but do you know why they go after the end user (us) rather than the creators (the fund companies, insurance companies) etc.  Seems kind of backwards.

May 21, 2006 6:13 pm

You can say most consumers don't know what they pay for on many items.

Cars, insurance, homes, swimming pools. We can go on and on. Does your

local real estate agent give you a disclosure stating that if you sell your own

house you can save yourself thousands of dollars? Do they have standard

breakpoints?

May 21, 2006 6:21 pm
bankrep1:

I agree it's wrong but do you know why they go after the end user (us) rather than the creators (the fund companies, insurance companies) etc.  Seems kind of backwards.



Good point Bankrep1, seldom addressed. Brokers are final distribution point for blame. Hypocrisy is timeless but it's kind of amazing the suck-up views to dealer management that are so common here.


Most of the 90's to now excess, when you scale it correctly, had little directly to do with brokers. Accounting scandals? CEO and related abuses? Product and prospectus pricing related? Market timing? We're certainly not the only target but...


How about an independent commissioned license separate from dealer captivity of reps? That's a reform worth consideration. Then dealers would only focus on clearing and product services and the compliance would be some where else. You're absolutely right bankrep1, how did these products they're blaming get blue sky-ed in the first place?





May 21, 2006 7:03 pm
rightway:

Its not a metter of paying fees, its a matter of knowing you are paying fees.  Most investors do not know what they are paying and that is simply wrong.


I very much agree. Many older prospects with whom I have spoken are largely unaware that mutual funds carry fees.


Ultimately, the only losers I see are the mutual funds - not the broker who sells them. They will just sell the cheaper funds more. Increased awareness of fees is a major reason for the explosion in American Funds.

May 21, 2006 7:04 pm
The Truth:

You can say most consumers don't know what they pay for on many items.
Cars, insurance, homes, swimming pools. We can go on and on. Does your
local real estate agent give you a disclosure stating that if you sell your own
house you can save yourself thousands of dollars? Do they have standard
breakpoints?


Real estate agents charge large fees?

May 21, 2006 8:39 pm
san fran broker:
rightway:

Its not a metter of paying fees, its a matter of knowing you are paying fees.  Most investors do not know what they are paying and that is simply wrong.


I very much agree. Many older prospects with whom I have spoken are largely unaware that mutual funds carry fees.


Ultimately, the only losers I see are the mutual funds - not the broker who sells them. They will just sell the cheaper funds more. Increased awareness of fees is a major reason for the explosion in American Funds.



I disagree.  I think it is because they held up so well during the bear market.  Fees are important but hedge funds prove all clients really care about is performance.

May 21, 2006 8:50 pm
Farmboy:
bankrep1:

I agree it's wrong but do you know why they go after the end user (us) rather than the creators (the fund companies, insurance companies) etc.  Seems kind of backwards.



Good point Bankrep1, seldom addressed. Brokers are final distribution point for blame. Hypocrisy is timeless but it's kind of amazing the suck-up views to dealer management that are so common here.


Most of the 90's to now excess, when you scale it correctly, had little directly to do with brokers. Accounting scandals? CEO and related abuses? Product and prospectus pricing related? Market timing? We're certainly not the only target but...


How about an independent commissioned license separate from dealer captivity of reps? That's a reform worth consideration. Then dealers would only focus on clearing and product services and the compliance would be some where else. You're absolutely right bankrep1, how did these products they're blaming get blue sky-ed in the first place?








Farmboy the whole thing pisses me off.  Look at the EIA's out there with 20 year surrender charges and 12% commissions.  Let's go after the crook selling them to seniors.   Wait!  Let's go after the people that invented them, wait they funded our campaign, oh yeah lets go after the guy who sold it.


It's time for Elliot Spitzer to hit the politicians (isn't he going to be governor)...... Got to love the USA

May 22, 2006 7:05 am

Just because the Real Estate Industry does not disclose as well as they
should does not make it right.  How often does someone employ a
real estate agent? 



Other products and invisible mark-ups?  When you buy a retail item
in a store it is a transaction and your are buying an item...for the
most part that is where your expense stops.  With us, they are
hiring your planning abilitites and consultative relationship and fees
that will last for years.  They should know how much they are
paying for this and decide whether it is worth it.  (Which is why
C shares will go Bye Bye soon) You cannot even compare the two.



Forget about other industries, it is a waste of energy. Put yourself in
the seat of the client...what would YOU want?  

May 22, 2006 7:07 am

Lets blame the product providers?  THere are plenty of products
and platforms to operate on that are not in the sights of the
SEC.  Why o you not use them?  Why do you use the "bad"
providers?  Take some responsibility for Gods sake.

May 22, 2006 9:08 am
rightway:

Its not a metter of paying fees, its a matter of knowing you are paying
fees.  Most investors do not know what they are paying and that is
simply wrong.



Call me a cynic, but in my honest opinion MOST investors are too darn lazy to bother to learn if they are paying fees, or how those fees are charged, hidden or otherwise.  That, ultimately, is why we all still have plenty of work.

Regrettably, there are plenty of advisors and investment 'manufacturers' who gladly take advantage of that willful ignorance to charge more than perhaps they otherwise should.

May 22, 2006 4:29 pm

Granted, there are plenty of EIA's that are being missold, but the number of complaints AND ratio of complaints vs sales are still lower than any NASD regulated product.  These are insurance products that VERY few clients are upset about.  However the NASD has taken this opportunity to pick up "their share" of a $25 Billion dollar market.


It's all about the benjamin's, baby!

May 22, 2006 8:47 pm
FreedomLvr:

Granted, there are plenty of EIA's that are being missold, but the number of complaints AND ratio of complaints vs sales are still lower than any NASD regulated product.  These are insurance products that VERY few clients are upset about.  However the NASD has taken this opportunity to pick up "their share" of a $25 Billion dollar market.


It's all about the benjamin's, baby!



Well put, what's appalling is how the dressing of compliance to cover for greed flies so freely. Gauber is a dealer crony with a crony agenda. How is this different from many of the scandals that they have used to empower themselves to dictate over others?