New Law will make it easy to Unionize

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Apr 16, 2009 6:15 pm

Would you join a Registered Rep Union????

 
I WOULD!
Apr 16, 2009 6:18 pm

Crap no...

I would go be a RIA before that happened
Apr 16, 2009 6:50 pm

Unions are a cancer to capitalism.

Apr 17, 2009 9:15 am
Gaddock:

Would you join a Registered Rep Union????

 
I WOULD!



No, thanks. I'd rather earn my money.

Apr 17, 2009 5:44 pm
HAAIC:
Gaddock:

Would you join a Registered Rep Union????

 
I WOULD!



No, thanks. I'd rather earn my money.

 
And what is it you do to earn your money that would be different if RR's organized as to not be screwed at the hands of a giant parasite called redundant middle management?
Apr 17, 2009 5:56 pm
rrbdlawyer:

popupControl(); We've been through the unionization thing before and it's just never panned out.  Read this 2003 story for some background: http://www.emii.com/article.aspx?articleID=1035321




 
My personal take on the issue is that the unions seem staffed by a combination of idiots and/or jerk-offs.  Sorry to be blunt, but that's how I saw things--hopefully they've change.  When I first started to call to speak to the old AFL-CIO staff, no one was ever at their phones or apparently even in their offices until noon.  You also had to call back several times before some subordinate finally arranged for his/her boss to return your call.  If anyone ran a business that way it wouldn't last long.  When I finally had some conversations, the sense of the discussion was that they really wanted to organize the cafeteria staff at Prudential and afterwards would give the registered reps a serious look (you just can't make that crap up).  They did call me back a few times trying to find out if I knew of any cafeteria workers or anyone at Pru sympathetic to that organization effort.  Now, don't get me wrong, in my prior non-legal career I was a union member.  Frankly, I didn't think much of the representation I got and thought there was far too much corruption, but I understood the value of being unionized and still think that honest unions do a valuable service for their members.
 
Then there was the other problem. RRs don't want to pay union dues and seem to love to spout all sorts of nonsense about free enterprise.  I say nonsense because at the end of the day, too many RRs are essentially captives of an abusive system that requires their registrations be housed at an employer/BD when they should be public registrations granted by the governmental issuing agency (just like lawyers, doctors, and CPAs). Moreover, this garbage that your license begins to expire when you're U5 is disgraceful -- does your driver's license start to expire when you sell your car or change jobs...does a lawyer or doctor's license start to expire when they leave their practice (no). As long as a professional satisfies Continuing Ed requirements and does not violate the laws/rules, then the license should be for life.  Similarly, member firms have too much pricing power when it comes to setting the payout grid. It's a take it or leave it proposition -- and god help you if you decide to leave and they want to retain the customers that you brought in.  The best example of how unbalanced the employer/employee relationship is can best be underscored by two simple facts.
 
1. No RR had a role in drafting the Protocol but every RR at the covered firms is captive to that agreement.  I'm sure that a union would have insisted upon more liberal terms.
 
2. Although FINRA is allegedly a self-regulatory organization, only member firms (employers) get to vote on rule proposals and elective office, but the SRO's rules and regulations frequently impinge upon the employment relationship and the arbitration forum that it runs is a mandatory forum for intra-industry disputes.  Like a union would tolerate such one-sidedness.
 
Don't get me wrong. I don't care one way or the other.  I don't love unions and I think that RRs have been foolish not to organize (if not a union then why not a trade group?).  Why 700,000 plus men and women wouldn't want to leverage those numbers into a powerful voice is beyond me.  And remember, I used to be an RR.
 
Bottom line: The unions just don't seem that interested in organizing Wall Street.  RRs don't seem inclined to join, much less pay dues. 

 
Great post thanks for your thoughts.
Apr 17, 2009 6:12 pm

I know an investment guy who makes his living hosing the unions (manages their money). He hoses the hosers. ( Ever look see a 30+ year teamster's pension ... whuh uh, where did the money go?  Gaddock, my impression is that the world of middle management, which I guess would be wire houses, is not going too well. Unionization would only prolong (your) misery.

 
RRB, I respect your opinon, but gimme a break, there's big money in unions for your kind. (Okay, okay, all lawyers and all FAs aren't alike. Saying that would be the modern equivalent of racism.)
Apr 17, 2009 7:14 pm

Where in Michigan are you? I grew up in Grosse Pointe.

Apr 17, 2009 7:24 pm

Oh, I'm not in Michigan or from there.

Apr 17, 2009 7:29 pm

Great post, mr. lawyer. Always a pleasure to read smart postings.

Apr 18, 2009 10:25 am
rrbdlawyer:

popupControl(); We've been through the unionization thing before and it's just never panned out.  Read this 2003 story for some background: http://www.emii.com/article.aspx?articleID=1035321




 
My personal take on the issue is that the unions seem staffed by a combination of idiots and/or jerk-offs.  Sorry to be blunt, but that's how I saw things--hopefully they've change.  When I first started to call to speak to the old AFL-CIO staff, no one was ever at their phones or apparently even in their offices until noon.  You also had to call back several times before some subordinate finally arranged for his/her boss to return your call.  If anyone ran a business that way it wouldn't last long.  When I finally had some conversations, the sense of the discussion was that they really wanted to organize the cafeteria staff at Prudential and afterwards would give the registered reps a serious look (you just can't make that crap up).  They did call me back a few times trying to find out if I knew of any cafeteria workers or anyone at Pru sympathetic to that organization effort.  Now, don't get me wrong, in my prior non-legal career I was a union member.  Frankly, I didn't think much of the representation I got and thought there was far too much corruption, but I understood the value of being unionized and still think that honest unions do a valuable service for their members.
 

 
Isn't that kind of like Jumbo Shrimp..and all the other oxy morons..
 
I would prefer to leave it how it is... Unions make a mess of things(look at GM, not totally their fault, but they didn't help any)
Apr 18, 2009 10:45 am
Gaddock:
HAAIC:
Gaddock:

Would you join a Registered Rep Union????

 
I WOULD!



No, thanks. I'd rather earn my money.

 
And what is it you do to earn your money that would be different if RR's organized as to not be screwed at the hands of a giant parasite called redundant middle management?



I don't have a union strangling money out of anyone, so I can make more money than I'm worth.

Apr 18, 2009 3:09 pm
OS:

Unions are a cancer to capitalism.

 

 
That's exactly right. All unions would do would be to add another layer of cost to the business. If you don't like your job, quit!  It's not that hard of a concept. If you don't like it at a wirehouse, go independent. 
 
Some people wanting to unionize couldn't go independent, because then they would have an idiot for a boss.  Sorry, I couldn't resist.
Apr 20, 2009 12:43 am

I understand why unions have a bad reputation. I am also well familiar with how they have hurt American industry.



If we step back though surely we can see that having management have 100% of the power isn't good for industry either. Many times management also puts their own interests above that of shareholders as well.



We all believe in capitalism because we're brokers. That goes without saying. I don't think a return to 1890's capitalism would necessarily be a good thing. I like weekends off. I like not having child labor. I don't long for the return of the American sweatshop.



This idea that we all search in vain for the cheapest labor is somewhat of a flawed argument. I can pay an American worker $ 30 an hour. I can pay a guy in Korea $ 15. I can pay someone in China $ 2. If we take the argument to it's fullest conclusion, why not just not pay anybody anything at all and bring back slavery.



The big flaw the Laissez Faire guys always make is that they forget that consumers are also workers. The whole thing breaks down if too many people are living on a subsistence level. Democracy means nothing at all without a vibrant middle class.



The current financial debacle argues against management being intellectually superior to the rest of us. The geniuses screwed up. The financial rocket scientists guided us into this fiasco.



Our industry is ill suited for unionization because of the commission pay structure. I don't walk around wishing I were in a union. I do believe that power being spread around is a good thing. I don't villanize management but I don't have a huge amount of trust for them either.



The death of democracy is when the soul is lost to the all mighty dollar. Things like community, loyalty, the common good, and patriotism all wilt when the only thing that matters is having someone mow your lawn for $ 5 bucks an hour. Our founding fathers were great and moral men. They valued making money but they also had high moral values which superseded the almighty dollar. Somehow in our time we have put greed on the throne and then tried to make it ok.



Democracies have life spans. I don't know where ours is in the cycle but when leadership at all levels becomes corrupt it's not a good sign. I think our business leadership is at the forefront of this corruption. What has seperated us from many banana republics that call themselves democratic has been our vibrant and large middle class. Economic ideologies mean nothing if you can't put food on the table.



I'm neutral on unions for this reason. Sometimes management becomes corrupt and needs to be booted and knocked off the pedestal.





Apr 20, 2009 1:06 pm

Clearly, the answer is to cut out all "middle men".


If I charge 1.5% for AUM under 100k, or 1% above $250,000, or whatever, and if the fee is visible and understood by the client, and if I use index ETFs that charge .1 or .2 or .3, the cost is fair, the 12b1s are gone, middle management and selling arrangements are gone, and demand for my service increases by referral, because clients understand the value proposition.
 
If a b/d wants to provide cost effective services, I'll use a b/d, or just go RIA.
 
The solution to dealing with cheap labor in China is to stop buying crap from China. (Demand shift.) Instead of buying new golf clubs every year, spend money on a better house made with North American labor and materials.
 
Don't add layers to a bad economic platform. Kind of like Microsoft adding layers to Windows, and needing new Intel chips every two or three years. Time to cut costs and complexity, we already have the CFP Board, FPA, and so on. The rest is up to you. The days of the expensive downtown wirehouse office and paying fancy lawyers to defend complex product pricing and confusing practices are numbered.
Apr 20, 2009 3:25 pm
Mishigun:

 Don't add layers to a bad economic platform. Kind of like Microsoft adding layers to Windows, and needing new Intel chips every two or three years. Time to cut costs and complexity, we already have the CFP Board, FPA, and so on. The rest is up to you. The days of the expensive downtown wirehouse office and paying fancy lawyers to defend complex product pricing and confusing practices are numbered.

 
Numbered??? Me thinks they gain at our loss every single day.
Apr 20, 2009 4:41 pm
Mishigun:

Clearly, the answer is to cut out all "middle men".


If I charge 1.5% for AUM under 100k, or 1% above $250,000, or whatever, and if the fee is visible and understood by the client, and if I use index ETFs that charge .1 or .2 or .3, the cost is fair, the 12b1s are gone, middle management and selling arrangements are gone, and demand for my service increases by referral, because clients understand the value proposition.
 
If a b/d wants to provide cost effective services, I'll use a b/d, or just go RIA.
 
The solution to dealing with cheap labor in China is to stop buying crap from China. (Demand shift.) Instead of buying new golf clubs every year, spend money on a better house made with North American labor and materials.
 
Don't add layers to a bad economic platform. Kind of like Microsoft adding layers to Windows, and needing new Intel chips every two or three years. Time to cut costs and complexity, we already have the CFP Board, FPA, and so on. The rest is up to you. The days of the expensive downtown wirehouse office and paying fancy lawyers to defend complex product pricing and confusing practices are numbered.
 I disagree with this a little because I think that is where the problem lies. GM pays people more than $100K/year to put a screw in(ok over simplifying but not by much). Lower income jobs always get sent somewhere else, always have.
Slaves did jobs that settlers use to do.
Then those jobs got shipped to mexico
Now china, india, south america etc..
 
It's a progression that makes sense, labor jobs will always be sent somewhere cheaper because the laborer isn't doing anything new(i.e. using their brain to figure out where the screw goes, it's done for them) same reason why advisors make more than the secretarys and sales assts, because they are coming up with the strategy.
 
Apr 20, 2009 6:12 pm

Squash, I'm not sure we disagree. There are a lot of ways to have an economy. Up until now, malls and the technology of manufacturing cool stuff for cheap have encouraged us to ship our dollars overseas, and now this is a problem (Chinese not buying enough from us).

 
As long as the dollars "turn", we can have people spending at restaurants, on services, on American products (more) - I don't have a problem with trading with China, let them make cheap stuff and bring on comparative advantage and so on. On the flip side, China is literally choking in pollution and of course overpopulation, and but we can enjoy good quality of life enjoying other things besides tons of manufactured "stuff" that you get at the mall, or Home Depot. For example, spending more on quality food ingredients or going out to eat.
 
As for the analogy to our industry, I think the days of b/ds manufacturing fancy products and scooping heavy fees are being questioned by a lot of people. We need the client, the client needs the advisor.
 
My point is, a guy can make a good living on a couple of hundred in "GDC" minus expenses without the wirehouse. Those guys are called low producers, in fact, many take the extra time to provide advice and invest for the long term. By cutting out the middle men (for example, the people who manage fund families like Putnam, Oppenheimer, Fidelity, and other mediocre fund families), and cutting out the fat at b/ds, the advisor, who is providing most of the real value to the client, can get paid more, and the client can get paid less.
 
In fact, this is the most significant economic force in our industry, I'm just pointing out the obvious. But, instead of a low producer at a wirehouse talking about unionizing, they should be figuring how to take their book to a place where they can net over 100k and enjoy a balanced life, doing what's best for the client over a long time (not needing to churn the book), or whatever.
 
The logical response is to cut costs and focus, not unionize, as that is just another cost.
 
Sorry if I'm being pedantic, after reading the bankruptcy thread, it's obvious a lot of us are really bored. I'm bored, and work is slow, it makes me feel like I'm "24".
Apr 23, 2009 4:17 pm

I look at the endless layers of middle management using every excuse to nickle and dime me to death. People who's knee jerk reaction to any problem is to simply cancel the trade, at the brokers expense ALWAYS, instead of finding a common sense solution.

 
Collective bargaining would be a great advantage to the broker force IMHO. Not only for the firm we REPRESENT, not work for, but for the various government agencies as well.
 
Otherwise we are at their mercy where the only avenue of protest is to resign.
 
Talk about a unilateral relationship.
Apr 23, 2009 6:20 pm

Gaddock, in the industry, 80% of clients with AUM of 1m+ are considering moving their money. Explaining fees and rationalizing portfolios is the best way to capture that money.