Vision, integrity and a return to common-sense investing were the main themes for financial advisors at Raymond James Financial's national conference.
Chet Helck, president and COO of Raymond James Financial Services, kicked off the mid-October conference with some encouraging words for financial advisors: “At no other time have we seen such a strong demand for advice.”
But this enthusiasm was tempered by the harsh realities facing the brokerage industry. The one-two punch of scandals and a still-recovering market have left investors unsteady, and Helck said ethical and long-looking advice will go a long way to helping them find their feet again. “Vision is the antidote to uncertainty,” he said.
Meanwhile, Raymond James' CEO Tom James minced no words in venting his opinion on the issue of after-hours trading of mutual funds.
“It's fraud, plain and simple,” he said. “Everyone in my company has known for years that they'll be terminated for doing that, immediately.”
Raymond James Financial Services, a unit of Raymond James, is one of the largest independent contractor firms in the country, with 3,755 financial advisors in 2,155 offices. Revenues have been flat through the bear market but the firm has continued to expand — in part because of Helck's belief that demand for advice will grow as the market continues to rebound.
However, with the scandals enveloping the industry, advisors need to be on best behavior — both to retain clients and to avoid trouble with regulators. “Read the firm's ethics statements, that's why they're there,” said James.
James also preached a return to common sense investing, invoking the time-honored practices of dollar-cost averaging and balanced asset allocation to ensure quality returns. “Avoid selling what's performed best lately,” James said, underlining how common the sense needs to be. Long-term investing and the buy-and-hold approach are back in vogue for good reason.
With regard to avoiding regulatory trouble, he directed brokers to document, document, document. “These are litigious times for our industry,” James said.
He also has some direct orders regarding the company's research department.
“Pay attention to the ratings of our analysts,” he said, without a trace of irony. “We're paying them to have opinions…we can fire them when they're wrong too often.”
In a nod to the research scandals that plagued some of the biggest brokerage firms, he said, “ If an investment banker tells [an analyst] to change a report I want to hear about it. And I want that banker gone.”
George Will capped the conference with a motivational speech expressing confidence in the market's resilience, the ability of the financial industry to improve its character and faith in the Chicago Cubs to win a World Series before the close of the century.
Two out of three wouldn't be bad.