August 2, 2010
In my 18 years in being a "financial advisor" (I currently hold Series 6,7,63,65, and 66) I have learned that I am also a business owner and that means I must evaluate my costs in doing business. If my costs continue to rise and profits fall, I will eventually make changes.
I assure you that the compliance related aspects to running my business have consumed more of my time and more of my money, and the result, in my opinion, has not drastically protected the consumer.
Each year my Broker Dealer mandates a half day visit with my Compliance Officer a 2 hour "Compliance Seminar" and 6 hours of online continuing education which emphasizes Professional Ethics, Suitability, and product knowledge. This is in addtion to the 15 hours of state continuing education requirements.
To me, it seems, it has reached a point where compliance mandates get in the way of an advisors ability to run a successful practice, and at the end of the day, there must be a balance. I have never received a referral from a client because of my ability to be an excellent "compliance" advisor. I am their "financial" advisor and they expect sound advice, excellent service, above average performance, and a fair price. But the compliance issues and the diluge of paperwork have certainly made this business less enjoyable over the years - for me and my clients: There are more disclosure forms that are never read thicker prospectus that are thrown away, longer suitability statements that are signed without review. Frankly, the paperwork is so onerous and cumbersome it almost creates an atmosphere of distrust: "Why do I need to sign all of this?" "Is all of this necessary?" "I don't have time to do all of this" have been a few of the client comments.
I can't really imagine having to spend more time and money on compliance than I do already. I now employ one part time assistant who spends at least half of her 16 hour work week keeping up with compliance and the related forms and paperwork. And I am a one person firm