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Voices

Why I’m dropping my FINRA license

What does the recent market sell-off have to do with my decision to drop my FINRA license?

In short, it’s a reminder that we advisors must take a closer look at a single factor in our business: client satisfaction.

I would argue our insulation from industry pressures and market downturns is only as strong as the intensity of our client-first mentality. How fail-proof are we, as our profession continues to change faster than we do? The pace of change is precisely why I made the decision to let my license go.

In a world of increasing competition and rapidly rising consumer expectations, especially in financial services, client loyalty and trust may be the most valuable asset we have as advisor CEOs. A 2016 poll by the American Association of Individual Investors found the majority of respondents (65%) mistrust the financial services industry to some degree. With a scarred reputation like that, not even the most robust product offering or technology can overshadow a feeling.

If we’re not acting in the best interests of our clients at all times, we’re falling short of the fiduciary standard we all follow so intentionally. Yes, the DoL ruling may have seen its last shimmer of light in 2018, but that doesn’t mean advisors should hold themselves to less. If you’re waiting on a law to be passed in order to do what’s in your clients’ best interests, it won’t be long before you are the one that goes extinct.

Over the past two years, we’ve invested heavily in people, technology and organizational structure. Part of this examination internally also included exploring the possibility of how we could better serve our advisors and their clients.

We decided to create a new brokerage option, which is an addition to our business model that allows advisors to offload their commission-based accounts and become RIA-only advisors. From hearing advisor demand for more flexibility in managing brokerage accounts to outlining our own strategic vision for where financial advice is moving, there were a number of factors that led us to forming this option.

Ron Carson at Carson Group's airport hangar in Omaha, Nebraska.

It will not only help us attract advisors but also reduce the amount of friction that often exists when advisors move through such a transition. Advisors will maintain the primary client relationship through the RIA, but won’t be tied to the fees, regulations, continuing education requirements or audits that go along with owning the brokerage assets. The assets purchased by us will be managed by our advisors through Cetera.

This decision to structure the brokerage business does not mean we are severing ties with our existing broker-dealer. We originally joined Cetera because they support our values and desire to serve our clients well. This addition further aligns Carson Group with Cetera strategically, but allows the advisors we serve a path to become RIA-only.

Dropping my FINRA license also doesn’t mean our advisors must drop theirs. It’s simply an option we’re offering advisors who decide this makes the most sense for their firm.

Another added benefit to the clients we serve is that the new system will not disrupt the client’s experience with their advisor. Current partner firms will be able to deliver a seamless experience, where their clients are able to see all assets through a single pane of glass, meaning the client will see all held away, brokerage and advisory accounts.

The end result is we help advisors free up more of their time for actually running their business. If we can take this off their plate and help them focus on value-added activities, we’re empowering them to better serve their clients. And that is what will ultimately bring our profession to the next level.

Investors are more educated on what they deserve from their advisor and have never been given the full right to transparency like they have today. As they wake up and learn more about what their advisor is charging, they deserve to know what’s in their best interest. They deserve to be served in the best way possible. They deserve to know their advisor is doing everything he or she can to provide value for a reasonable fee.

We owe it to clients, and to our businesses.

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