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Aug 22, 2006 5:55 pm

[quote=NASD Newbie]

Completely differnt scenario, dear fellow.

My point of view is that when you have a formalized power of attorney the dangers of being found guilty of abusing the fiduciary duty are far greater than the risk of not being believed that you discussed exit strategies with your client.

There are a lot of brokers who think that a signed discretionary authority is some sort of shield that prevents them from being liable in case the trades done with the client don't work out.

It's a form of, "You said I could do whatever I wanted with your money and this is what I did.  It's a shame that you lost money but since you said it was OK for me to do it all I have to say is 'Gosh, I'm sorry.'"

That is simply Bullschidt.  What happens is you become even MORE  RESPONSIBLE and there is no place to hide because the panel will believe the client was not consulted.

There is no bona-fide reason to have discretionary authority at the level you guys operate.  The folks who run the funds you put your clients into have it as part of the basic agreement--but you don't need it working at "Jones Asset Preservation and Shoe Repair---Securities offered by LPL Financial Services."

[/quote]

Again mr. know-it-all  where is the supervision in your scenario?  Heaven forbid that it fall onto compliance as all they do is check signatures.... but then where is the Branch Manager just busy hiring and training?

Aug 22, 2006 6:16 pm

It does not require a branch manager--they only review discretionary trades where the RR is choosing what to trade, or how many to trade.

They are not expected to be involved in every transaction between the rep and the customer.

Aug 22, 2006 6:27 pm

You seem very confident that a panel will side with the planner on the 'he said' 'she said' cases. 

Is there a reason that you think that the client is going to look like a liar?  I would have thought it was 180 degrees from what you are suggesting. 

Aug 22, 2006 6:36 pm

[quote=ribsnwhiskey]

You seem very confident that a panel will side with the planner on the 'he said' 'she said' cases. 

Is there a reason that you think that the client is going to look like a liar?  I would have thought it was 180 degrees from what you are suggesting. 

[/quote]

The reason the panel will side with the advisor is because it doesn't make sense that a client would not be involved at all in the decisions.  They, the client, cannot afford to appear completely disinterested, and the most elementary form of interest is to talk about what action to take if the market turns against the position.

Aug 22, 2006 7:55 pm

[quote=NASD Newbie]

It does not require a branch manager--they only review discretionary trades where the RR is choosing what to trade, or how many to trade.

They are not expected to be involved in every transaction between the rep and the customer.

[/quote]

By the above statement I guess you've never been a branch manager nor have any clue about appropriate supervision.  This why I have labelled you a DANGEROUS poster.  If anyone chooses to follow your advice they do so at their own peril.  I'm sure that Mr. Singer would concur.  Please go back to walking your spouse and talking to your dog.

Aug 22, 2006 8:54 pm

[quote=compliancejerk][quote=NASD Newbie]

It does not require a branch manager--they only review discretionary trades where the RR is choosing what to trade, or how many to trade.

They are not expected to be involved in every transaction between the rep and the customer.

[/quote]

By the above statement I guess you've never been a branch manager nor have any clue about appropriate supervision.  This why I have labelled you a DANGEROUS poster.  If anyone chooses to follow your advice they do so at their own peril.  I'm sure that Mr. Singer would concur.  Please go back to walking your spouse and talking to your dog.

[/quote]

A branch manager accepts responsibility for every trade made in his branch, however they rarely pay more than cursory attention to what is going on.

If you think that Mike Manager sits there and thinks about each and every trade that each and every broker does you're delusional.

In many ways a BOM is no more responsible for what happens in their branch than President Bush would be for something that happened in the State Department--sure the buck stops somewhere, and there is somebody who is ultimately responsible. But that's on paper.

What most managers will do is give some actual thought to the discretionary orders done in their branch--thinking about the rep, the rep's experience and what the manager knows about the client (if anything) and other things.

Rarely does a manager overturn a discretionary order, but it does happen.

Home office types like to think that there is a lot more going on in the branches than what is really happening--there are managers who have excellent staffs who will cover for them while they're away for several days.

Regardless managers are not required to review and specifically approve orders where the only use of discretion was timing the trade--those become just another trade on the daily report and are acknowledged at the same time all the others are.

Aug 22, 2006 9:50 pm

How long did you serve as a branch manager, Newbie?

Aug 22, 2006 11:41 pm

[quote=NASD Newbie]

In many ways a BOM is no more responsible for what happens in their branch than President Bush would be for something that happened in the State Department--sure the buck stops somewhere, and there is somebody who is ultimately responsible. But that's on paper.[/quote]

Having completed my NASD required CE recently, I can tell you the NASD likes to just that sort of thing on paper. Often with suspensions, fines and sometimes, bans.

Aug 22, 2006 11:50 pm

[quote=mikebutler222]

Having completed my NASD required CE recently, I can tell you the NASD likes to just that sort of thing on paper. Often with suspensions, fines and sometimes, bans.

[/quote]

That question is missing a verb or something.

Aug 23, 2006 1:16 am

it's not a question, you fool.

It's an accusation.

Aug 23, 2006 4:47 am

[quote=NASD Newbie][quote=mikebutler222]

Having completed my NASD required CE recently, I can tell you the NASD likes to just that sort of thing on paper. Often with suspensions, fines and sometimes, bans.

[/quote]

That question is missing a verb or something.

[/quote]

I'd rather be missing a verb than to be missing a few cards short of a full deck, such as yourself! 
Aug 23, 2006 12:39 pm

I now count 3 times in the last 2 wks that newbie has been found out as a fool who knows squat about the business.  We all ought to start keeping a count on this moving forward.  Nothing more enjoyable than seeing somebody pat themselves on the back as experts only to be shot down time and time again. 

Aug 23, 2006 1:12 pm

[quote=csmelnix]I now count 3 times in the last 2 wks that newbie has been found out as a fool who knows squat about the business.  We all ought to start keeping a count on this moving forward.  Nothing more enjoyable than seeing somebody pat themselves on the back as experts only to be shot down time and time again.  [/quote]

That's odd, I count exactly zero.  What are the three things you've counted?

Aug 23, 2006 3:08 pm

[quote=NASD Newbie]

[quote=csmelnix]I now count 3 times in the last 2 wks that newbie has been found out as a fool who knows squat about the business.  We all ought to start keeping a count on this moving forward.  Nothing more enjoyable than seeing somebody pat themselves on the back as experts only to be shot down time and time again.  [/quote]

That's odd, I count exactly zero.  What are the three things you've counted?

[/quote]

There's another one now!

Aug 23, 2006 3:15 pm

[quote=NASD Newbie][quote=mikebutler222]

Having completed my NASD required CE recently, I can tell you the NASD likes to just that sort of thing on paper. Often with suspensions, fines and sometimes, bans.

[/quote]

That question is missing a verb or something.

[/quote]

It wasn't a question and the irony is that the word missing from between "to" and "just" is PUT, Put.

Sep 14, 2006 5:47 pm

[quote=NASD Newbie][quote=Malcolm]

So NASD, the top wirehouse I work at has no problem with it.  So why would LPL?  I use MATES and run a nice discretionary book of biz.  I kills me to think everytime I pushed a button to buy or sell across the board it would cost me over a $1000.   

Maybe that is one of many reasons I should stay with the flagship. 

[/quote]

Actually your top wirehouse does have a "problem" with you but they can live with the problem because of their management structure.

There are computer programs watching your accounts on an hourly basis and if things get going outside of parameters it's easy enough to get you into your branch manager's office for a quick chat regarding what is going on.  The chain of command is in place.

In the LPL model your OSJ is not right there so they, LPL, would have difficulty demonstrating to an arbitration panel that they had an effective method to supervise brokers with relatively extraordinary activity.  That scares management types--especially the compliance guys.

That Joeboy is doing high turnover business at LPL would seem to indicate that they, LPL, will live with it.  Then there's the chance that LPL brought Joeboy on board without knowing the extent that he's an aggressive transaction oriented producer.

[/quote]

NASD Newbie - Sorry - I'm kind of going after your posts today.  I promise I'll shut up and get to work in a minute. 

I'm afraid your facts are off again.  Within the LPL model your OSJ is actually closer than with the wirehouses because YOU ARE YOUR OWN OSJ.  You need to get your 24 license if you don't have it (I did) and then you can simply supervise yourself.  Otherwise, you would need to be supervised by an existing local LPL OSJ.  I think they told me there is an option for being supervised from San Diego, but this is only used in rare cases and is not encouraged.  LPL has their own computer programs and Compliance people providing oversight of all activity.  When I did my tour of their home office, I took over an hour with a senior member of their Compliance team (they staff about 200 Compliance people or something close to that.)  We talked through the entire process of my review/approval - where they catch many of these things - and how I would be supervised after joining.  They provide audits, etc and are so far ahead on the paperless environment side it makes a lot of the work easy.  (My blotter is tracked electronically and once a week I print it and throw it in a file.  It's a push of a button.)   When you first start they watch you pretty closely - you get some calls from Compliance people, etc, but now it's just occassional. 

By the way - the Compliance people here are NICE!  I never knew this was possible.  The same goes for most of the service people I've dealt with.  Independent b/d back offices understand that the advisor is the economic engine of the firm.  There is a huge difference in how you're treated across the board.    

I don't know what firm you're with, but I can guarantee you've had more lawsuits for more dollars and more negative press than LPL.  I did Google searches, etc before I joined and I found one story on B-share issues for LPL, but it was nothing compared to the wirehouses, product companies etc.

Sep 14, 2006 6:09 pm

MPLSINDY:

You spent a lot of time responding to NN. It was kind of you to try to educate him, however the fact is that NN was a Broker only for a short time. He failed then became a Mutual Fund Wholesaler. He is now retired and spends every waking minute of every single day obsessed with the REAL advisors who TRY to communicate on this forum.

Most folks no longer waste their time anymore.