The way to improve the sector is eliminate firm supervision of “reps” …

How far would you guess a propsal to release firms from their obligation to supervise reps would get with public or the regulators?

[quote=Seeker15]Doctors at a hospital would never let this sort of thing happen to them. [/quote]

My guess is that the public would tell you they think doctors aren't supervised enough.

[quote=mikebutler222][quote=ymh_ymh_ymh]

...to guarantee biased judgments in favor of the broker-dealer and against the broker and/or retail client.

[/quote]

Interesting perspective. From where I sit the retail client has a huge advantage, then the firm. The only person almost 100% assured of losing is the rep.

[quote=joedabrkr] [quote=mikebutler222][quote=ymh_ymh_ymh]

...to guarantee biased judgments in favor of the broker-dealer and against the broker and/or retail client.

[/quote]

Interesting perspective. From where I sit the retail client has a huge advantage, then the firm. The only person almost 100% assured of losing is the rep.

[/quote]

I sorta that's what yolanda and seeker are saying
[/quote]

True, aside from the part where I think the client has the advantage over both the broker and the firm.

I wish someone compiled statistics on this.

I would weight it like this:

45% firm

35% client

20% broker (always loses no matter who wins)

[quote=ymh_ymh_ymh]

I wish someone compiled statistics on this.

I would weight it like this:

45% firm

35% client

20% broker (always loses no matter who wins)

[/quote]

You could be right, but as easy it is for a client to win one of these things, I'd given them 75%. The broker? They're the first to be thrown under the bus by the firm and the first to be lied about by the client.

Agree 100% on that (poor broker, even if the client lied).

I think there are some statistics out there about how many cases actually go to arbitration each quarter and who "wins" if you want to call it that.

If I find a link I will post it.

[quote=ymh_ymh_ymh]

Agree 100% on that (poor broker, even if the client lied).

I think there are some statistics out there about how many cases actually go to arbitration each quarter and who "wins" if you want to call it that.

If I find a link I will post it.

[/quote]

Thanks, that sounds interesting.

Ask and ye shall receive!

http://www.nasd.com/ArbitrationMediation/NASDDisputeResoluti on/Statistics/index.htm

FD: I am not with the NASD and I hope this link works. Some very interesting stuff here (in my opinion)

[quote=Seeker15]The way to improve the sector is eliminate firm supervision of “reps” …

How far would you guess a propsal to release firms from their obligation to supervise reps would get with public or the regulators?

I'm not making political predictions but pointing out the truth of the matter. Clients would be better off if dealers didn't supervise and it was replaced by professional conduct boards and private independent liability malpractice insurance.

The current system is Orwellian in nature. A product design fails...blame a producer, corruption from the highest office...pass the cost down to the producer and lowest client in cost and on and on. Of course there is a huge margin and layer of waste along with any real supervision responsibility firms perform, the real reason hell will freeze over before producers get a free advisor system. Certainly lawyer like the current deep pocket culture the system represents to abuse as well.

The way to improve the sector is eliminate firm supervision of “reps”

How far would you guess a propsal to release firms from their obligation to supervise reps would get with public or the regulators?

I'm not making political predictions but pointing out the truth of the matter. Clients would be better off if dealers didn't supervise and it was replaced by professional conduct boards and private independent liability malpractice insurance.

Either in politics or practice, I just don't see how a scheme that would obviously lower the level of supervison would improve things for the public. BTW, just imagine what that malpractice insurance would cost......

 A product design fails...blame a producer, corruption from the highest office...pass the cost down to the producer...

There's plenty wrong with our current system, but I can't see those two possibilities high on the list.

 Of course there is a huge margin and layer of waste along with any real supervision responsibility firms perform...

There may be plenty of waste, real and imagined, but supervision is much tighter than what you're suggesting.

, the real reason hell will freeze over before producers get a free advisor system.

The real reason we aren't set up like MDs supervision-wise is that the standards for entry into this field just isn't comparable to that required to be an MD.

Either in politics or practice, I just don't see how a scheme that would obviously lower the level of supervison would improve things for the public. BTW, just imagine what that malpractice insurance would cost......

My point is that when you eliminate the regulatory cartel dealers have with a true license the compliance cost would decline. So would the legal abuses of the big pocket syndrome that the central planning model creates. I don't think consumers end up less protected with less government like machinery and expectations involved. Do you really think the recent build out in the nasdr has made the average client better off the last 5 years on protection? Just the oppposite. 

Central planning under the NASD increases client abuse by creating the beast that needs constant feeding. Who do you think pays these fines? Here's exit Glauber's boast;

Oversaw vigorous enforcement actions to protect investors and restore confidence in the markets, capped by a record $134 million in fines last year.

http://www.nasd.com/PressRoom/NewsReleases/2006NewsReleases/ NASDW_017051

Really, who pays the 134 million in the end? The firms? The perps? No, it's added to client charges or producer costs to a large degree. Not to mention all the excess regulation cost the resolves little and leads to more overhead which leads to more greed, pressure and customer abuse. 

The real reason we aren't set up like MDs supervision-wise is that the standards for entry into this field just isn't comparable to that required to be an MD.

I wasn't comparing myself to a doctors skill and the task isn't brain surgery either. Let's switch to plumbing contractors and ask the same question? The point is the centrally planned NASD does more harm than good at the retail level. It protects the guilty and distributes all damages to the innocent by the socialist expectation that it contains. It's the total cost and excess of the current system that makes it worse for clients, a license would improve conditions and eliminate firm waste which is another burden passed down to clients and producers. A market insurance system would be more fair for the innocent participants also. IMOHO

There may be plenty of waste, real and imagined, but supervision is much tighter than what you're suggesting.

Like the Patriot Act, it's mostly wheel spinning and waste. The total cost of the process is paid by some for the benefit of others in a zero sum result at best, it's often worse than this. The cripple effect in the regulated sector has led to a boom in the less regulated arena; internet, infomercials etc. Go listen to the Cox commission on "senior Abuse" to see how mixed up the leadership is. They can add "I.D. theft, phony oil and gas fraud with higher than fair commissions in a paragraph". You can find a replay at CSPAN, it's shocking events like Enron or market timing can be brought to your doorstep as if more than a tiny percentage could be involved in such excess individually.

If we got right with licenses and freedom costs and the system would improve. Dealer-rep regulation should be optional and sales reps shouldn't be tied to firms who steer a scapegoat system at producers and the publics expense.

I don't think legislators would "buy" placing less responsibility on management and more on the producer for a lot of reasons. The system doesn't work because senior management often "uses" the system as it is now and refuses to back the producer up, even if he or she is right.

I do think legislators "might" consider raising the bar for what constitutes a "qualified" and "disinterested" arbitrator. Ultimately, the responsibility for "disqualifying" an unqualified or biased arbitrator rests with the respondent and his/her lawyer (just like in civil court with a judge and/or jury pool).

There are cover-ups in the medical community, too. It's not a perfect system, either.

If any of you are serious about getting the system changed I would suggest calling and/or sending e-mails to legislators who are on the Senate Banking Committee and/or Judiciary.

The most pro-active US Senators right now for reform are Charles Grassley (R:IA) and Arlen Specter (R:PA). You don't have to be a resident/constiuent of theirs but it helps.

FD: I have discussed a few things with both of these US Senators' staffers as well as one of my US Senator's (Maria Cantwell) directly. They have all been very receptive thus far.

[quote=ymh_ymh_ymh]

I don't think legislators would "buy" placing less responsibility on management and more on the producer for a lot of reasons. The system doesn't work because senior management often "uses" the system as it is now and refuses to back the producer up, even if he or she is right.

I do think legislators "might" consider raising the bar for what constitutes a "qualified" and "disinterested" arbitrator. Ultimately, the responsibility for "disqualifying" an unqualified or biased arbitrator rests with the respondent and his/her lawyer (just like in civil court with a judge and/or jury pool).

There are cover-ups in the medical community, too. It's not a perfect system, either.

If any of you are serious about getting the system changed I would suggest calling and/or sending e-mails to legislators who are on the Senate Banking Committee and/or Judiciary.

The most pro-active US Senators right now for reform are Charles Grassley (R:IA) and Arlen Specter (R:PA). You don't have to be a resident/constiuent of theirs but it helps.

FD: I have discussed a few things with both of these US Senators' staffers as well as one of my US Senator's (Maria Cantwell) directly. They have all been very receptive thus far.

[/quote]

Thanks, I respect your point of view. I don't think individual licenses away from firms lead to less supervision. It's more about eliminating the labor/management conflicts of interest that run right thought the current system. The reason producers are scapegoats are all the vested interests in maintaining that in the current system. The NASDR issues fines and clients and producers pay them as they are distibuted in the uniform liability structure through the firms.

No system involving people is ever perfect. Lumping 600000 people into one top-down system filled with conflicts could be greatly improved. The reason our costs and risks are higher than they should be has to do with ability of others to just kick in costs and risk into our business at anytime from a firm/regulator/mass system level. If you could private license, similar to the 1940 act, life would be better for all; including clients. There would still be dispute structures and firms could offer a compliance umbrella but the cartel on supervision tied to "employment" should be abolished.