LPL & Discretionary Equity Accs

Another questions is would LPL even allow that kind of turnover.  It seems to be that their hands off style is inviting a "failure to supervise" nightmare.

If you run that on the SAM I platform, those ticket charges are passed to ther client.  If you're doing well for the client, what's $15/trade?  If you're on SAM II, eating all the ticket charges, I think it would be cost-prohibitive.

I don't know how LPL would view this kind of activity, but my guess is, it would receive more than normal attention/supervision.

Indyone is right about SAM II  versus SAM I.  I  run that sort of business, though not quite that level of assets.

I have not found any issues with compliance so far.  My turnover is running around that level.  There is no ‘churning’ issue because you are not being paid any portion of the ticket charges.

Hope that helps.
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I just for the heck of it did a scan for global multicap growth mutual funds and some of the top performers. 

Here they are along with their turnover ratios:

Fidelity 41%

Marsico 118%

Phoenix 52%

Janus 57%

American Funds 35%

I looked at my average for the last three years and it came to 40.7%   Thanks for chiming in Joe and Indyone. 

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=joedabrkr]Indyone is right about SAM II  versus SAM I.  I  run that sort of business, though not quite that level of assets.

I have not found any issues with compliance so far.  My turnover is running around that level.  There is no 'churning' issue because you are not being paid any portion of the ticket charges.

Hope that helps.
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//–>[/quote]

You can't be brought into arbitration on churning charges because you're not earning a portion of ticket charges?

[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.

You are right about questions from mgnt NASD.  But I do quarterly reports and when up/down capture, alpha, R-Squared, Sharpe Ratio, Sortino and standard deviation look better than any of our outside managers, people seem to be alright with what I am doing. 

I would agree agree however they would be happier not having me do what I do.  But it isn't just a sidleline thing for me and they know that.  This is almost all I do here and it is where I spend most all of my time everyday. 

Arbitration is a terrible thing.  I know of one very intelligent and experienced broker...over 20 years in the biz who was recently made to look like a fool by the plantiffs hired gun in arb so I do my best to keep a sharp eye on the ball and keep excellent records.   

It is interesting to see how you look at it from the compliance standpoint first and I understand why.  The manager who was in that meeting with the above broker told me all about it and it was as unpleasant for him as it was the broker. 

The plaintiff's bar attacks the brokerage industry using forms of the RICO laws which are what is used against organized crime.

They portray the branch manager as a John Gotti type figure and the brokers who work for the manager as soldiers in the crime family--Goodfellas.

Arbitrators tend to listen and not pay much attention--but it sets the mood for the hearing.

The other thing that can bite you big time is how a perfectly capable client suddenly doesn't understand.

Years ago, back in the days of litigation rather than arbitration, our firm was sued in Illinois by the CFO of a Fortune 500 company who had lost a lot of money chasing Bills and Bond futures.

He sat in the witness stand and repeated again and again that he didn't understand the risks and barely realized that interest rates changed all that much.

The jury of his "peers" appeared to believe him and before the jury got the case a settlement was proposed and accepted.  I forget the details, but he lost something like $150,000 and settled for about half of it.

From a broker's point of view that is infuriating because the broker now has "Yes" answers on his U-4, but from the firm's point of view it's better to not run the risk of huge punitive damage awards.

[quote=NASD Newbie]

[quote=joedabrkr]Indyone is right about SAM II  versus SAM I.  I  run that sort of business, though not quite that level of assets.

I have not found any issues with compliance so far.  My turnover is running around that level.  There is no ‘churning’ issue because you are not being paid any portion of the ticket charges.

Hope that helps.
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You can't be brought into arbitration on churning charges because you're not earning a portion of ticket charges?

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[quote=joedabrkr] [quote=NASD Newbie]

[quote=joedabrkr]Indyone is right about SAM II  versus SAM I.  I  run that sort of business, though not quite that level of assets.

I have not found any issues with compliance so far.  My turnover is running around that level.  There is no 'churning' issue because you are not being paid any portion of the ticket charges.

Hope that helps.
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You can't be brought into arbitration on churning charges because you're not earning a portion of ticket charges?

[/quote]

How can it be labeled as "churning" if you're not getting paid for the activity.
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//–> [/quote]

Churning is a noun used in lieu of excessive activity.

How?  By filing a demand for arbitration.

Will you be found guilty even though you did not benefit?  Of course--if the client lost money and the panel decides that they were being churned it doesn't matter if you got paid or not.

Fiduciary responsibility and all that.

How many of you are aware of a really weird one.  A guy using Schwab's on-line service churned himself.  Demanded arbitration and was awarded his money back because Schwab did not have a system in place to keep a client from destroying themselves.

[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.

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Joeboy, the NASD does not recognize you as your own supervisor just because you have a Series 24 ticket.  Arbitration panels certainly don't.

I repeat the LPL model lends itself to becoming a "failure to supervise" nightmare.

This entire discussion started because you said you could not be charged with churning because you have not built in reason to make trades to generate commissions since you're paid a wrap fee.

How about the idea that you are motivated to trade in a frenzy to generate profits for your client--and that frenzy blew up in your face.

That's what happened to you in the tech implosion--right?

Why do you need discretionary authority anyway--isn't that an unnecessary exposure to fiduciary responsibility risks?

[quote=NASD Newbie]

Joeboy, the NASD does not recognize you as your own supervisor just because you have a Series 24 ticket.  Arbitration panels certainly don’t.

I repeat the LPL model lends itself to becoming a "failure to supervise" nightmare.

This entire discussion started because you said you could not be charged with churning because you have not built in reason to make trades to generate commissions since you're paid a wrap fee.

How about the idea that you are motivated to trade in a frenzy to generate profits for your client--and that frenzy blew up in your face.

That's what happened to you in the tech implosion--right?

Why do you need discretionary authority anyway--isn't that an unnecessary exposure to fiduciary responsibility risks?

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[quote=joedabrkr]

Actually the "tech explosion" worked out just fine for me, as my clients know.

I prefer discretionary authority to manage an account in an objective logical fashion according to the clients clearly established goals, needs, and risk tolerance.

Far prefer that to debating a potential account change with a client, having them say yes/no, and then years later telling the arbitrators "Oh I never said that. I didn't understand."
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You're a fool if you think having a client's signature on a discretionary agreement is going to be more of a defense in the case where a client says they don't understand.

A basic thought process in this business is that the only reason you should have discretion is because you don't have the time to talk with a client--that you're whining that you don't want to talk to them is enough to get your license lifted.

Sure hope LPL is not monitoring this.

[quote=NASD Newbie][quote=joedabrkr] [quote=NASD Newbie]

[quote=joedabrkr]Indyone is right about SAM II  versus SAM I.  I  run that sort of business, though not quite that level of assets.

I have not found any issues with compliance so far.  My turnover is running around that level.  There is no 'churning' issue because you are not being paid any portion of the ticket charges.

Hope that helps.
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You can't be brought into arbitration on churning charges because you're not earning a portion of ticket charges?

[/quote]

How can it be labeled as "churning" if you're not getting paid for the activity.
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Churning is a noun used in lieu of excessive activity.

How?  By filing a demand for arbitration.

Will you be found guilty even though you did not benefit?  Of course--if the client lost money and the panel decides that they were being churned it doesn't matter if you got paid or not.

Fiduciary responsibility and all that.

How many of you are aware of a really weird one.  A guy using Schwab's on-line service churned himself.  Demanded arbitration and was awarded his money back because Schwab did not have a system in place to keep a client from destroying themselves.

[/quote]

I actually heard that one when I was at Schwab.

Newbie, don't tell any of us we're fools after the 30-year bond portfolio you set up for the widow.  You keep looking for holes in the independent business model, while ignoring the craters at your old firm, and you sound more like someone's shill every day.  I'd be happy to compare LPL's arbitration record to wherever you worked.  My guess is that LPL will compare just fine because of their business plan of hiring experienced advisors and insisting on series 24 licensing for the bulk of their reps.  You can sit there at your keyboard and scream the sky is falling 24 hours a day if you have nothing better to do, but you'll not convince me and thousands of other LPL reps that the firm has a bad business model.  I just went through a compliance exam and it was a heck of a lot more thorough than what I went through at brand X...I'm in the process of responding to a two-page findings letter that left virtually no stone unturned.  Yes, LPL tends to be reasonably hands off, as long as your record is clean and you're not setting off a bunch of surveillance alarms with your activity, but that does not mean that they don't take supervision and compliance seriously.  I know for a fact that some prospects never get past the gate because of the smell test.  Sure, if you have close to 7,000 reps, a few bad eggs may get through, but I think that overall, LPL's oversight and compliance record would compare just fine to whatever firm you toiled for.

Care to enlighten us with some specific metrics at your old firm?  If not, let's move on to something more constructive.

I am not saying that LPL has a bad business model, what I am saying is that it invites the very difficult to defend "failure to supervise" claim that has been the nail in the coffin for the defense of a great many arbitrtion claims.

There are certain universal truths, and one of them is that having a Series 24 license yourself does not qualify as being proper supervision of yourself--your 24 qualfies you to supervise others.

Don't you remember studying things like an OSJ must be inspected at least annually by a principal not charged with managing that OSJ?

In an arbitration hearing, when you're being portrayed as a gangster out to screw little old people out of their money, it comes across as very bad when they get you to say that you don't have anybody looking over your shoulder every day.

Additonally, there has been very little arbitration because a monkey with a pencil could pick winning stocks since 1982--the true test for your relationship with your clients, and the impact of the failure to supervise argument, won't come until your clients look at statements that reflect half of what they had at one point.

Why do you bother to pay for E&O insurance?  What is a situation that you believe could develop where they would pay off for you?

NASD - Out of curiosity, what’s the point in having a fake name in your profile?  Not being nit-picky, just curious.

[quote=BrokerRecruit]NASD - Out of curiosity, what's the point in having a fake name in your profile?  Not being nit-picky, just curious.[/quote]

Why do you think it's a fake name?

I would simply assume.  It’s easy for someone to look you up otherwise.

By all means, look me up.

"Why do you bother to pay for E&O insurance?  What is a situation that you believe could develop where they would pay off for you?"

When a bona-fide error is made by me.  Let's say a client asks me to sell 1000 shares and I buy 1000 shares, and let's say it'sa volatile stock like GOOG and the price moves $50 against me before the client catches the error on a confirmation.  That mistake costs me $5,000 and my E&O insurance $45,000.

"There are certain universal truths, and one of them is that having a Series 24 license yourself does not qualify as being proper supervision of yourself--your 24 qualfies you to supervise others.

Don't you remember studying things like an OSJ must be inspected at least annually by a principal not charged with managing that OSJ?"

Absolutely.  I do an annual exam and oversight on a satellite branch, and an outside principal came to my office back in June to do an exam on me.  Thus, I think we've covered that concern.

[quote=Indyone]

When a bona-fide error is made by me.  Let's say a client asks me to sell 1000 shares and I buy 1000 shares, and let's say it'sa volatile stock like GOOG and the price moves $50 against me before the client catches the error on a confirmation.  That mistake costs me $5,000 and my E&O insurance $45,000.

[/quote]

Are you sure?  Why would an insurance company offer coverage that could be so easily abused?

[quote=Indyone]

Absolutely.  I do an annual exam and oversight on a satellite branch, and an outside principal came to my office back in June to do an exam on me.  Thus, I think we've covered that concern.

[/quote]

In an arbitration that will appear to be virtually no supervision--which is my entire theme.

How aware are you of what is going on in that satellite branch?  If one of that reps clients decides to demand arbitration you'll be named too--can you demonstrate that you are not guilty of "failure to supervise?"

Is the principal who comes by your shop once or twice a year going to be able to make a credible case for his abilty to to supervise you?

Compliance issues are becoming more and more involved and less and less friendly.

Yes I'm sure...I once worked with a rep who had E&O pay off on a similar trade error.

I speak with my satellite office almost daily and sign off on all new accounts, all correspondence, all trades, etc.  In addition to the annual on-site exam, LPL does ongoing electronic surveillance.  When I came back from nationals last week, I had a fax from LPL requesting documentation on a VA trade from the satellite office and giving me two days to fax said documentation to them.  That's just an example of some of the off-site surveillance LPL compliance conducts regularly.

I agree that compliance is less and less friendly, but of the three firms I've worked with over the last 17 years, I think LPL has as good a handle on this issue as any.

[quote=Indyone]

I agree that compliance is less and less friendly, but of the three firms I've worked with over the last 17 years, I think LPL has as good a handle on this issue as any.

[/quote]

Do you believe that a public arbitrator and the legal experience arbitrator will accept the argument that making phone calls makes one innocent of a failure to supervise complaint?

Have you worked at a full service wirehouse--with an onsite branch manager and perhaps an onsite compliance officer?

[quote=NASD Newbie][quote=joedabrkr] [quote=NASD Newbie]

[quote=joedabrkr]Indyone is right about SAM II  versus SAM I.  I  run that sort of business, though not quite that level of assets.

I have not found any issues with compliance so far.  My turnover is running around that level.  There is no 'churning' issue because you are not being paid any portion of the ticket charges.

Hope that helps.
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You can't be brought into arbitration on churning charges because you're not earning a portion of ticket charges?

[/quote]

How can it be labeled as "churning" if you're not getting paid for the activity.
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//–> [/quote]

Churning is a noun used in lieu of excessive activity.

How?  By filing a demand for arbitration.

Will you be found guilty even though you did not benefit?  Of course--if the client lost money and the panel decides that they were being churned it doesn't matter if you got paid or not.

Fiduciary responsibility and all that.

How many of you are aware of a really weird one.  A guy using Schwab's on-line service churned himself.  Demanded arbitration and was awarded his money back because Schwab did not have a system in place to keep a client from destroying themselves.

[quote=BUDDYROSE]

[quote=NASD Newbie][quote=joedabrkr] [quote=NASD Newbie]

[quote=joedabrkr]Indyone is right about SAM II  versus SAM I.  I  run that sort of business, though not quite that level of assets.

I have not found any issues with compliance so far.  My turnover is running around that level.  There is no 'churning' issue because you are not being paid any portion of the ticket charges.

Hope that helps.
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You can't be brought into arbitration on churning charges because you're not earning a portion of ticket charges?

[/quote]

How can it be labeled as "churning" if you're not getting paid for the activity.
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Churning is a noun used in lieu of excessive activity.

How?  By filing a demand for arbitration.

Will you be found guilty even though you did not benefit?  Of course--if the client lost money and the panel decides that they were being churned it doesn't matter if you got paid or not.

Fiduciary responsibility and all that.

How many of you are aware of a really weird one.  A guy using Schwab's on-line service churned himself.  Demanded arbitration and was awarded his money back because Schwab did not have a system in place to keep a client from destroying themselves.

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NASD made a comment on (and I paraphrase) "Why would you want
discretionary anyway…why take on the extra fiduciary responsibility?"



I think the a good answer is the benefit of trade execution through
block trading.  Many times it takes several days to get contact
with a client to gain authorization to buy or sell in non-discretionary
wrap accounts.  I don’t know anything about arbitration
personally, but I like the model drift reports, performance reporting,
and miriad of other benefits our clients and ourselves enjoy under the
discretionary platform, and feel these things help my the clients and
stay away from the arbitration table. 



As for the origional post question regarding trade fee’s:  Would
the benefits of going to LPL be that much better than your current
platform and be worth the risk and hassle of moving?

Unless you are trading something volatile you do not need formal discretionary authority--and having it will almost certainly come back to bite you if you do get charged with anything.

It is perfectly acceptable to accept oral instructions to, "Take me out if it starts to move against me, but don't put me into anything else without talking to me."

Should you be dragged into arbitration you will have a clear record of not simply moving from A to B to C and so forth.

Having the power of attorney signed causes you to assume a much higher level of fiduciary responsiblity because you're admitting that you don't talk to the client.  Plaintiff's attorneys love to find out that their client gave a broker discretion--it's a gimme that they're going to win their case.

If you're simply managing funds the idea that you need discretion is absolutely specious.

If you're managing individual equities all you should get is limited discretion to take the guy out of a position that is going against him based on your judgement.  There is no reason why you cannot call him and tell him, "Jeff, the XYZ trade was not working out so I took you out of it.  You've got $xxx left and I suggest you put it into ABC which looks like a much better horse to ride."

Arbitration panels know that the worst idea in the world becomes great when you don't have to explain it.

[quote=NASD Newbie]

Unless you are trading something volatile you do not need formal discretionary authority–and having it will almost certainly come back to bite you if you do get charged with anything.

It is perfectly acceptable to accept oral instructions to, "Take me out if it starts to move against me, but don't put me into anything else without talking to me."

Should you be dragged into arbitration you will have a clear record of not simply moving from A to B to C and so forth.

Having the power of attorney signed causes you to assume a much higher level of fiduciary responsiblity because you're admitting that you don't talk to the client.  Plaintiff's attorneys love to find out that their client gave a broker discretion--it's a gimme that they're going to win their case.

If you're simply managing funds the idea that you need discretion is absolutely specious.

You really don't know what it's like to run a book of business, do you?

If you're managing individual equities all you should get is limited discretion to take the guy out of a position that is going against him based on your judgement.  There is no reason why you cannot call him and tell him, "Jeff, the XYZ trade was not working out so I took you out of it.  You've got $xxx left and I suggest you put it into ABC which looks like a much better horse to ride."

You sound just like all the other wirehouse middle management drones...So let me get this right, you think it's better to have informally verbally granted "sorta discretion" instead of written authorization, a fee based platform so as to eliminate confilct of interest issues, and performance reporting and clearly delineated written goals and risk tolerance info?  Riiiiiight.......

Arbitration panels know that the worst idea in the world becomes great when you don't have to explain it.

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[quote=joeboy]

You sound just like all the other wirehouse middle management drones...So let me get this right, you think it's better to have informally verbally granted "sorta discretion" instead of written authorization, a fee based platform so as to eliminate confilct of interest issues, and performance reporting and clearly delineated written goals and risk tolerance info?  Riiiiiight.......

[/quote]

I believe that unless the client is a surgeon who may be in an operating room when something simply must be done to protect him, or a judge or attorney who may be in court, or a teacher who may be in a class, there is no reason why you should ever get a client to agree to give you carte blanche with their account.

If I am your client it is easy enough to discuss the parameters with me.  "I am not wild about stop loss orders, so what I suggest is that you authorize me to take you out of the position along with my other clients if it goes against you.  I will then get in touch with you to let you know what I did and suggest another trade that I think is suitable."

Should you show up in an arbitration hearing and try to say that you had no obligation to let me know what was going on because I had given you power of attorney they're going to hang you out to dry.

Also, claiming that you had no vested interest in churing my account because you were using a fee based platform instead of commission based is going to go nowhere.  All my attorney has to do is ask you why you made so many trades and you'll become so twisted up with your stammering excuses that your case will be lost right there.

You may not like to hear what I am saying, but you are a fool to not listen anyway.

[quote=NASD Newbie]

[quote=joeboy]

You sound just like all the other wirehouse middle management drones...So let me get this right, you think it's better to have informally verbally granted "sorta discretion" instead of written authorization, a fee based platform so as to eliminate confilct of interest issues, and performance reporting and clearly delineated written goals and risk tolerance info?  Riiiiiight.......

[/quote]

I believe that unless the client is a surgeon who may be in an operating room when something simply must be done to protect him, or a judge or attorney who may be in court, or a teacher who may be in a class, there is no reason why you should ever get a client to agree to give you carte blanche with their account.

If I am your client it is easy enough to discuss the parameters with me.  "I am not wild about stop loss orders, so what I suggest is that you authorize me to take you out of the position along with my other clients if it goes against you.  I will then get in touch with you to let you know what I did and suggest another trade that I think is suitable."

Should you show up in an arbitration hearing and try to say that you had no obligation to let me know what was going on because I had given you power of attorney they're going to hang you out to dry.

Also, claiming that you had no vested interest in churing my account because you were using a fee based platform instead of commission based is going to go nowhere.  All my attorney has to do is ask you why you made so many trades and you'll become so twisted up with your stammering excuses that your case will be lost right there.

You may not like to hear what I am saying, but you are a fool to not listen anyway.

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[quote=joedabrkr]

You are in so far over your head and you have NO CLUE!  It's amazing!
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As a stand alone statement that is meaningless.

[quote=NASD Newbie]

[quote=joedabrkr]

You are in so far over your head and you have NO CLUE!  It’s amazing!
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As a stand alone statement that is meaningless.

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[quote=NASD Newbie]

I believe that unless the client is a surgeon who may be in an operating room when something simply must be done to protect him, or a judge or attorney who may be in court, or a teacher who may be in a class, there is no reason why you should ever get a client to agree to give you carte blanche with their account.

If I am your client it is easy enough to discuss the parameters with me.  "I am not wild about stop loss orders, so what I suggest is that you authorize me to take you out of the position along with my other clients if it goes against you.  I will then get in touch with you to let you know what I did and suggest another trade that I think is suitable."

Should you show up in an arbitration hearing and try to say that you had no obligation to let me know what was going on because I had given you power of attorney they're going to hang you out to dry.

Also, claiming that you had no vested interest in churing my account because you were using a fee based platform instead of commission based is going to go nowhere.  All my attorney has to do is ask you why you made so many trades and you'll become so twisted up with your stammering excuses that your case will be lost right there.

You may not like to hear what I am saying, but you are a fool to not listen anyway.

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[quote=joedabrkr]

See the bold print.  That’s called time and price discretion, and it’s not acceptable in most firms nowadays.  Very problematic stuff because it’s open to interpretation.  Define “if it starts to go against you” for example.

Oh, and by the way I’m a little above the silly trick of editing someone’s screen name when I quote their posts.   And you ask if people think I’m childish?  Really now…
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You don't need to explain to me what time and price exceptions are.  You will never find a client who will argue about it--so just do it.

You're the one who said you don't want to have to talk about your decisions with the client--I'm simply saying that that attitude is the surest way I can think of to get yourself barred for life.

You're still a relative newbie--you have years to blow up and with your casual attitude towards rules and your vocal disrespect for managment paint a picture of a compliance problem waiting to happen.

A monkey with a pencil could do as well as you've done in your career--wait till the going gets tough and then get back with me with your cocky attitude.

ahh old dino boy knows everything EXCEPT discretion.

That in itself would suggest that you ARE a ej gp.....

clueless

in the dark

and love turning the manure!

[quote=NASD Newbie][quote=joedabrkr]

See the bold print.  That’s called time and price discretion, and it’s not acceptable in most firms nowadays.  Very problematic stuff because it’s open to interpretation.  Define “if it starts to go against you” for example.

Oh, and by the way I’m a little above the silly trick of editing someone’s screen name when I quote their posts.   And you ask if people think I’m childish?  Really now…
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You don't need to explain to me what time and price exceptions are.  You will never find a client who will argue about it--so just do it.

You're the one who said you don't want to have to talk about your decisions with the client--I'm simply saying that that attitude is the surest way I can think of to get yourself barred for life.

You're still a relative newbie--you have years to blow up and with your casual attitude towards rules and your vocal disrespect for managment paint a picture of a compliance problem waiting to happen.

A monkey with a pencil could do as well as you've done in your career--wait till the going gets tough and then get back with me with your cocky attitude.

Do you think I'd ever put that in writing above or below my name?

Regardless the fact is that you can verbally assume timing discretion.  Most compliance types are going to say that if you regularly make use of it you should get it in writing--but the reality is the less you have in writing the better off you are.

If a client drags you into arbitration and the discretionary paperwork is entered as evidence it becomes an albatross around your neck because of all the fiduciary issues that go hand-in-hand with it.

On the other hand your attorney should be able to get the guy to admit that you and he always had an "understanding" that you would protect his best interests and take him out of something that did not seem to be working well.

The panel will know that there is no need for a formal power of attorney for that relationship--and the albatross is not in the room.

Getting discretionary paperwork signed is a bad idea unless the client truly cannot be reached during business hours.

Even then, there is no compelling reason for you to be allowed to reinvest their money without talking to them.  "Take me out without talking to me if it seems prudent, but don't do anything else with my money without talking to me" is the only safe way to go.

Your comment that you don't like to have to explain your decisions is a really really really dangerous thing to believe, much less to say.

NASD Newbie,

Are you for real with what you are suggesting regarding discretion?

It isn't the "compliance types" the broker needs to worry about but rather the "regulator types" that would love to see a antique like yourself get caught trying to defend yourselves with "your" interpretation of discretion.  And then once you loose (and guaranteed that you will) then your firm's "compliance types" will be instructed by those "regulator types" to review your entire trading past .......  you'd be lucky to have a home if you've been using discretion as you espouse. 

If you are still selling, "you in a HEAPA trouble boy"!

Many rules are enforced because people are too timid to violate them.

I'm telling you that if a client says, "We talked about getting out and I told him that it was OK with me if he sold the stock when he thought it should be sold" that no panel is going to come down on the broker.

I'm further saying that if the broker has a signed discretionary agreement he assumes significantly more fiduciary responsibility becasue the presence of the document verifys that the broker was not discussing the trades with the investor.

Without the document it becomes a "He said, He said" case that can fall either way.

[quote=NASD Newbie]

Many rules are enforced because people are too timid to violate them.

I'm telling you that if a client says, "We talked about getting out and I told him that it was OK with me if he sold the stock when he thought it should be sold" that no panel is going to come down on the broker.

I'm further saying that if the broker has a signed discretionary agreement he assumes significantly more fiduciary responsibility becasue the presence of the document verifys that the broker was not discussing the trades with the investor.

Without the document it becomes a "He said, He said" case that can fall either way.

[/quote]

and where does the branch manager and "compliance types" come into the picture with this signed discretionery agreement?

[quote=compliancejerk][quote=NASD Newbie]

Many rules are enforced because people are too timid to violate them.

I'm telling you that if a client says, "We talked about getting out and I told him that it was OK with me if he sold the stock when he thought it should be sold" that no panel is going to come down on the broker.

I'm further saying that if the broker has a signed discretionary agreement he assumes significantly more fiduciary responsibility becasue the presence of the document verifys that the broker was not discussing the trades with the investor.

Without the document it becomes a "He said, He said" case that can fall either way.

[/quote]

and where does the branch manager and "compliance types" come into the picture with this signed discretionery agreement?

[/quote]

Small wonder they booted you out of production, Putsy.  Given your, shall we say, casual attitude towards regulation it's a lucky thing your firm wasn't censured and fined for failure to supervise you.

Vast experience your ass.

[quote=NASD Newbie]

Many rules are enforced because people are too timid to violate them.

I'm telling you that if a client says, "We talked about getting out and I told him that it was OK with me if he sold the stock when he thought it should be sold" that no panel is going to come down on the broker.

I'm further saying that if the broker has a signed discretionary agreement he assumes significantly more fiduciary responsibility becasue the presence of the document verifys that the broker was not discussing the trades with the investor.

Without the document it becomes a "He said, He said" case that can fall either way.

Now you are assuming that clients all lie.  That's not the case and if you think it is you have a poorly defined sense of values yourself.

Virtually everybody will say that you discussed the exit strategy, nothing makes more sense than that.  If they deny that they did, they are painting themselves as either a liar or a fool.

The problem is on the other side of the equation--using the money to establish a new position.

That is where I am saying that there is NO REASON why you should not be able to talk to the investor BEFORE you put him into a new position.  Missing an opportunity because you cannot reach me in a timely fashion does not result in me losing money--it results in me losing opportunity.

On there on the fringe are the compliance problems waiting to happen--the broker who says, "I don't like to have to explain my logic to the client."

That's what you said Joe, and that makes you scary.

I guess it all boils down to whether your clients trust you or not.  Before I got my licenses I let my financial advisor make all the decisions based on the information he had about me.  He knew my liquidity needs, my comfort level, etc.  I let him run the show because that's what he was paid for.

And that's true anytime I use a professional I trust to handle an aspect of my life I want to outsource.  Doctor, lawyer, travel agent, etc.  If I trust them I tell them what I'm looking for and let them take care of the details.  If I discover they aren'tworking to my benefit or they do something that shakes my trust I'll usually give them a second chance with a bit more of my oversight.

They still get statements showing trades and positions, so they aren't out of the loop.  If you have to go to the client for every decision, what are they paying you for?  Unless you're charging a hourly/annual/etc fee for financial planning advice (which I don't), you get paid per transaction or a % of assets for managing money.  Advice is free and they can get it from nearly all of the same places you can.

Just my 2 cents.

I have been wrestling with this dilemma for a while now. Having a lot of clients with individual positions in various stocks and some of those positions being very large the potential for loss if there were to be a sudden decline in a particular stock is huge. 

Since I do not have discretionary accounts and prefer to discuss any portfolio moves with the client before the fact, I usually discuss placing stop loss, buy limit and other similar protective types of orders.  If I and the client can agree on the spreads on these orders so we don't stop out at minor market moves and we place the orders, it gives me some level of comfort.  If the stock has begun to move dramatically and I am not able to contact my client at least we have a prearranged strategy to mitigate any loss, preserve or take gains without me having to be glued to the quote monitor.  Most of my clients readily agree to this and they feel good about it too because we frequently get together and adjust the limits up or down as the circumstances require.

The issue I am having is several clients who have some big positions in single stocks (over 600K in several cases) plus other slightly smaller positions in various other stocks.  They have fallen in love with their stocks and refuse to take gains, set stop loss orders for even a portion of these positions. My warnings about being severely over-weighted in their portfolios falls on deaf ears.  Because the stocks just keep going up and up.....they don't believe me when I tell them they can lose all of their gains in just a few hours and if I am not available or I can't reach them we would be in big trouble.

I guess all I can do (and have done) is to document my conversations and have had the clients sign letters stating that I had given them this advice and that they have declined to take it.

Any suggestions on how I can get these people to smarten up?  And don't say cut them lose.  They are good clients in everything else but this plus I would lose millions of dollars from my book in stocks, bonds, mutual funds and insurance if I sent them packing.

I meant sell limit…not buy limit…   Not enough coffe yet this morning

[quote=FreedomLvr]

If you have to go to the client for every decision, what are they paying you for? 

[/quote]

You're kidding, right?  They're paying you to make suggestions regarding what they should do--but it's THEIR money and THEY should get to say yes or no.

If you went to a doctor who believes that your skull needs to be opened up and part of your brain scooped out would you think he was acting appropriately if he told you he was going to put you to sleep in a operating room because you needed to have your tonsils out simply because he didn't want to have to explain the brain surgery?

For the umpteenth time.  Use very acceptable verbal approval for your exit trade--discretion as to timing--but NEVER reinvest the money without talking to your client.

Nothing is so important that you have to be able to do it without talking to the client.  Period.

Regarding Babbling's question.

Rather than selling the stock at a stop enter it as a short sale--the legendary short against the box.

Suppose the client owns XYZ at a basis of $10 and it's now trading at $80.

You enter a sell short at 70 stop order.  If the stock touches 70 in a fair and orderly decline the trade will trigger.

At that point the client will still own his long position with a basis of $10 while also having a new short position at about 70.

The stock then drops to 55.

Cover the short and realize a short term gain of $15 to help cushion the loss of $25 in the stock.  Essentially you took them out at $70 as you wanted to, but they didn't have to declare their huge gain.

Yes they will have a $15 gain, and yes it will be short term, but they should fall on their knees and thank you for your wisdom.

In another vein, buying puts is always a possibility if the stock has options.  If it doesn't then it's probably a pretty thin issue and even stop orders might be very disappointing.

Anyway, back to puts.  Puts work great, but they cost something and if the stock does not crash you're going to look like you don't know what you're doing--plus they don't enter into the client's thought process because they don't see the stock going down.

Doesn't it take money to sell short?  Yes it does--but what happens is the long position is placed in a margin account and since we have 50% Reg T the long position will provide the shorting power to meet the call on the short against the box trade.

If you get stopped out because the stock is falling through 70 you need to come back and place a buy stop order at 70 so you cover your short sale if it should start back up in a classic whip saw.

Additionally you have to close short against the box trades within a year--otherwise they could be used to transfer gains from tax year to tax year.

Actually enter a Sell Short at 70 Stop, Limit 68 or something like that.

Youre nightmare scenario is that the stock is trading at 71.  Bad news.  Opens at 60 and you're short at 59.70--somewhere no where near 70 like your plan called for.

That is rare, but it does happen.  If it gaps like that, it's better to have a chance to talk to the client--explain what happened and allow them to make the decision.

Often--more often than not--a short covering rally will occur to drive the stock back a ways so taking the time to phone the client is not going to hurt much, if at all.

Keep in mind that whatever is happening is not your fault--in fact you are talking about a way to save their money. They're the guy who was going to hold on forever, regardless.

As you said, they fell in love with the stock.

Of course not selling at a profit is classic tax deferral.  Hadn't you heard?

[quote=compliancejerk][quote=NASD Newbie]

Many rules are enforced because people are too timid to violate them.

I'm telling you that if a client says, "We talked about getting out and I told him that it was OK with me if he sold the stock when he thought it should be sold" that no panel is going to come down on the broker.

I'm further saying that if the broker has a signed discretionary agreement he assumes significantly more fiduciary responsibility becasue the presence of the document verifys that the broker was not discussing the trades with the investor.

Without the document it becomes a "He said, He said" case that can fall either way.

[/quote]

and where does the branch manager and "compliance types" come into the picture with this signed discretionery agreement?

[/quote]

NASD Newbie,

How come you're dodging my questions oh one who is full of it and himself?

If the client has signed a descritionary agreement, then there aren't any issues or concerns regarding time and price now is there? This makes your posts on this subject moot (just like all you other ones).

Please don't go away angry ....  just go away and pester your dog, your wife and you kids (or have had their fill of you too?)

Nope--anytime there is a signed discretionary form the entire situatiion become filled with "fiduciary duty."

It is better to not have that duty if the client is complaining because it all but paints you as guilty from the get go.

The only advantage to a signed discretionary authority is the investor who licks his wounds and wanders away without talking to an attorney.

If they talk to an attorney the attorney will welcome the news that there was a discretionary power signed because that makes the broker automatically guilty for what happened.

To argue the opposite point of view akin to saying that you cannot be found guilty of statutory rape if the 14 year old consented.

Now you are assuming that clients all lie.  That's not the case and if you think it is you have a poorly defined sense of values yourself.

Virtually everybody will say that you discussed the exit strategy, nothing makes more sense than that.  If they deny that they did, they are painting themselves as either a liar or a fool.

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

Newbie,

I think that opinion paints you out to be a fool.  You actually think that a client who takes you to arbitration isn't going to conveniently forget your past conversations??? Are you serious?? 

And for you to point to "a poorly defined sense of values yourself" as a reason for feeling that way, you are truly naive. 

So once again, lets recap Newbie's suggestions.  Go ahead and liquidate a falling position to protect the client and when arbitration comes expect for them to stick up for you about a passing conversation you had when you opened their account.  You will never have a problem unless the client is a liar or a fool. 

Is this crap a joke?

Newbie, you are showing your age.  I thought you said you posted to make us think, not think about how freakin off your rocker you are. 

[quote=ribsnwhiskey]

Go ahead and liquidate a falling position to protect the client and when arbitration comes expect for them to stick up for you about a passing conversation you had when you opened their account.  You will never have a problem unless the client is a liar or a fool. 

[/quote]

Where did I say you had the conversation when you opened the account?  I said you have the conversation when you establish the position.  It goes like this:

Joe, I'm not a big believer in stop orders as long as I'm around because the danger of getting whipsawed is very real--so what I'd like to be able to do is take you out if I think it's in your best interest.

I will not reinvest your money without talking to you, but I really do need to be able to get you out if you're losing money and I need to act quickly.

That does not require a power of attorney, and if he does pull you into arbitration your attorney will be able to get him to admit that he had a conversation like that.

The panel will assume that he did too, because it makes so much sense.

He will sit there thinking that if he denies having the conversation he will be tripped up with the follow up questions which will be designed to make him seem like he didn't even pay attention to what he was doing.

Again, there is no reason to have signed discretionary power--there is nothing good that can come of it.  That was true in 1976, 1986, 1996 and 2006--so it makes no difference when somebody says it.

I'm did not once argue that discretionary power was something I am endorsing. 

"That does not require a power of attorney, and if he does pull you into arbitration your attorney will be able to get him to admit that he had a conversation like that.

The panel will assume that he did too, because it makes so much sense."

Newbie, you continue to display ignorance.  I am aware of the dialogue that has to take place (remember, some of us actually have clients that we have to engage in dialoge with).  You to continue to act as though the clients are all people of high ethical standards who will stand on your side through arbitration.  You are going to be let down a lot for the rest of your short lifespan if you really believe that. 

Clients will deny that they signed paperwork that you have right in front of you, but you think they will remember a verbal arrangement for your selling procedures?

I'm not telling you that your idea of doing what is in the best interest of the client is wrong and I have no issue with your belief that you should always contact a client before making a purchase.  I think that those ideas probably make a lot of sense for most situations.  But don't be dumb and blind thinking that everyone will be forced to remember a 'he said' 'she said' argument from an attorney or a panel. 

A partner of mine semi-retired a while back and he had some clients that needed help oneday that he couldn't be there.  They had some confusion about a whole life policy they purchased 15+ years back.  They signed a form allowing the use of their dividends as a premium payment for thier policy.  They denied every making this change or approving it or even discussing it.  They became more angry and defiant and continued to insist that they never approved this change.  As I stepped out to get an additional statement on a wrap account for them, I asked my assistant to call the carrier and see when the change was requested.  Within 10 minutes I had the paperwork that the clients BOTH (husband and wife) signed less than 2 years ago authorizing this change.  When I put it in front of them to ask if they remembered the change, they again denied that it was thier signature.  I asked them if they would like to start paying the premiums out of their own pocket and they said no, to just leave it as it is. 

You put way too much confidence in people. 

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."

I do not think that discretionary authority in any way is a shield that prevents an planner from being liable in a case. 

I do think there is relevance in my example.  You say that clients will be honest about your discussions of exit strategies when confronted by an attorney or a panel.  I say that they aren't always honest when their own signature sits in front of them, so I believe that you are being way to optomistic (never thought that word would be associated with you) about how a client will behave in this situation. 

[quote=ribsnwhiskey]

I do not think that discretionary authority in any way is a shield that prevents an planner from being liable in a case. 

I do think there is relevance in my example.  You say that clients will be honest about your discussions of exit strategies when confronted by an attorney or a panel.  I say that they aren't always honest when their own signature sits in front of them, so I believe that you are being way to optomistic (never thought that word would be associated with you) about how a client will behave in this situation. 

[/quote]

It doesn't matter what they say--you are allowed to say it, and the panel will believe you because it's the way any relationship will be handled.

If the client denies having the discussion when faced with you saying that it occured they will be the one who appears to be disingenuous.

What you have to avoid is having their attorney hang you with "Fiduciary Duty" which is most easily avoided by never accepting it in the first place.

[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?

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.

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=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.

[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=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.

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

[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.

[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.

it's not a question, you fool.

It's an accusation.

[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.

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=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=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!

[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.

[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.

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.