FINRA recently announced that it was backing off — for now — on its initiative to control U.S. registered investment advisors, WealthManagement.com reports. Richard Ketchum, the agency’s chairman said: “I’m not a big believer in beating a head against the wall,” and said that FINRA would “focus on things we can impact.”

This change in strategy was due to the U.S. Congress not planning on changing regulations regarding investment advisers. Right now, the Securities and Exchange Commission regulates the advisers, but because of budgetary constraints, they only get the chance to look at the advisers approximately once every 11 years.

However, FINRA did not permanently drop seeking the ability to take over reviewing registered investment advisers.  It called it a “critical investor protection,” but said that there was “clearly a lack of consensus about how best to address that problem.”

Congress has shown no interest in changing who reviews registered investment advisers. The agency said that “other issues are closer to the top of Congress’ agenda, so this one will likely not be resolved in the near term,” but it hoped that the legislative body would review the issue in the future.

Written by Lisa Swan

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President Barack Obama recently named former federal prosecutor Mary Jo White to lead the Securities and Exchange Commission. OnWallStreet.com takes a look as what the appointment means for financial advisors, especially how this will affect the reported establishment of a “uniform fiduciary standard for advisors and broker-dealers.”

White recently said that she plans on continuing to do what ex-SEC head Mary Schapiro did. That includes implementing that uniform fiduciary standard, which is required under the Dodd-Frank Congressional financial reform legislation.

Schapiro wanted to expand the present fiduciary standard, which means that advisors must recommend things which are in the best interest of their customers, to cover broker-dealers. With Schapiro’s resignation from the commission, the agency is currently deadlocked along partisan lines regarding expanding it, but White’s confirmation would add a vote to allow expansion of the standard.

When announcing the nomination, President Obama praised White’s experience. “Over a decade as a U.S. attorney in New York, she helped prosecute white-collar criminals and money launderers,” he noted, as well as prosecuting John Gotti and those who bombed the World Trade Center in 2003.

White said that if she is confirmed, she looks forward “to committing all of my energies to working with” the SEC “to fulfill the agency’s mission to protect investors and to ensure the strength efficiency and the transparency of our capital markets.”

Written by Lisa Swan

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Did you know that there are some words you may use with clients when talking about retirement planning that are a turnoff? OnWallStreet.com explains the words you should never use.

The business site covered a media roundtable last week, where Timothy Noonan of Russell Investments, whose company did a study of advisor markets, explained which phrases will get a negative reaction from your customers.

Noonan said to never use the phrases “financial planning” or “retirement income.” That’s because some think that “retirement income” means that they are going to get a sales pitch for some sort of insurance product. They also may be reminded of their own retirement “sins,” like not saving enough for it. In addition, “financial planning” is a phrase that comes across as boring, Noonan says.

So what phrase should be used instead? He suggests “lifestyle design.” Noonan told the gathering that “if you want a get a disengaged person to re-engage maybe you should try talking to them about what you can do to help them design a lifestyle that’s sustainable.”

Written by Lisa Swan

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Laura Baron was one of the first female financial advisors in this country. She is still on the job at age 93, WealthManagement.com reports.

Baron was a secretary for Oppenheimer and Co. in the 1950s when her boss suggested she get her license to become a stockbroker. When she went to take the Series 1 test, the proctor had to check with his supervisors to see if it was okay for her to take the examination due to her gender.

Baron had a unique situation when she started out at Edwards and Hanley as a stockbroker in 1959. She worked as a secretary in the morning, and then made cold calls in the afternoons and evenings. Baron faced discrimination in the office – she said that “there were 11 men in my office and every one of them truly disliked me.” Potential clients were also confused by Baron, although it was a male client who finally gave her a big break because she was “a woman in a man’s world.”

But Baron persevered, working twice as hard as the men, she says, and eventually built up a big client base. In 1966, the New York Stock Exchange named her “Woman of the Year.”  In recent years, she has worked as a financial advisor to many widows, helping the women understand their portfolios. At 93, Baron still works two days a week.

However, as much progress as women have made over the years, they are still underrepresented in her field – there is still only one other female broker at her office.

Written by Lisa Swan

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So much for those transparency promises that Republicans made when they took over the U.S. House of Representatives in 2010, in which they said that any bill they proposed would  be posted online 72 hours in advance of any vote. Investment News notes that with the legislation the Republicans proposed to solve the fiscal cliff issue, that promise was not kept. That’s because the two bills were only posted 24 hours before a vote.

The article says that “as we reach the end of the fiscal-cliff hanger, it’s becoming clear that the transparency promise is being violated.” Investment News says that “both parties are adept at keeping the public in the dark about what’s going on in the capital.”

As it turns out, House Republicans rejected Speaker of the House John Boehner’s so-called “Plan B,” so the point may be moot. But the issue is still one that matters as far as keeping promises.

In addition, as the publication notes, it’s not only Republicans who are keeping citizens in the dark. Investment News notes that President Barack Obama’s own fiscal cliff plan is hard to find details on, with most details coming from “leaks from administration aides that are then published in the media.“

Written by Lisa Swan

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There are over 1,000 independent broker-dealers out there, notes Ned Van Riper of OnWallStreet.com. So how do financial advisors decide which one to go with?

Van Riper notes that many advisors will choose a broker-dealer based on things like going with the first recruiter who calls, or checking an industry publication to see which one ranks highest on some metric like which one has the most advisors.

He says that unfortunately, some advisors go with who offers the biggest financial reason, even though this could tie them up financially with the broker-dealer even though it doesn’t ultimately work for them. Van Riper writes that “reality hits advisors after 12 months and they realize they affiliated with a firm whose culture, strategic direction or business mix does not align with their own.”

Instead, advisors should look for the broker-dealer that best fits their own vision. The author says that it is important that advisors do their homework, much like their clients do their own homework on hiring advisors, to find the best broker-dealer for themselves and their own clients.

Written by Lisa Swan

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In order to be on track for 2013, you should tell your financial advisor what life changes you have had in 2012. In addition, there are some questions you really should ask your financial advisor at the end of the year. Here is what The Daily Finance thinks you should talk about:

  • Do you need to make portfolio changes? Perhaps it’s time to think about new asset allocation distribution.
  • What about tax-deferred accounts? Maybe you should add money to thinks like IRA s and 529 plans. Perhaps it’s time to change your regular IRA to a Roth IRA. Also ask your advisor about your 401(k), if you have one.
  • Do you need to do any new tax strategies before the end of the year? Keep in mind that taxes could be higher in 2013.
  • How did your portfolio do this year? You need to know if you made money or lost money, and how your portfolio did as compared to other people and benchmarks. You also need to see if you are on track to make your financial long-term aspirations.
  • How much are you paying in fees for your portfolio? You want to make sure you are not paying too much to have your portfolio. Ask your advisor for a breakdown of the fees.
  • What can you do to have a great 2013? You want next year to be financially fruitful for you. Learn from your mistakes, get advice from your financial advisor, and move on.

Written by Lisa Swan

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Around 85 or so high-flyers at Goldman Sachs could be getting a phone call that could change their lives, Here Is the City reports. On Wednesday Goldman chair Lloyd Blankfein will call them with this short but sweet message: “Congratulations, you’ve become a partner.”

It’s not like these staffers get to apply for the position, the article notes. There is no job interview process, nor is there a job listing for these coveted roles. Instead, the higher-ups have been secretly meeting for months to determine who gets to be partner. There is a process called “cross-ruffing” involved, in which Goldman Sachs executives talk to other employees about the people being considered for partner, but never the would-be partners themselves.

Here Is the City says that becoming a Goldman Sachs partner brings “prestige that is, arguably, unrivalled in the financial world,” It also means “vast wealth” thanks to the huge bonuses that go along with the job, which could net them millions per year. It can be a real golden ticket for those picked.

Those who become partners at Goldman Sachs also can move onward and upward. Ex-U.S. Treasury secretary Hank Paulson was once a Goldman partner, as was Gavyn Davies, former chairman of the BBC.

Written by Lisa Swan

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In an effort to help business victims of Hurricane Sandy, the Financial Industry Regulatory Authority altered some of their rules. OnWallStreet.com reports that FINRA has relaxed some mandatory requirements for financial advisors.

The publication says that “rules were altered on Thursday regarding office relocations, deadlines for regulatory filings, such as U4 forms, deadlines for continuing education, and new member applications.” FINRA is also giving time extensions for those who were afflicted by the superstorm.

The agency said that it “recognizes that members need relief from many regulatory requirements as a result of the dislocation caused by Hurricane Sandy.”  In addition, it has encouraged financial advisors to let displaced advisors work with them temporarily. FINRA also said that financial firms should put a notice on their websites for customers to let them know who they should contact regarding their accounts.

FINRA itself faced issues due to Hurricane Sandy. It has been unable to access its New York office membership office. It advised new members to contact them regarding the status of their paperwork.

Written by Lisa Swan

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Hurricane Sandy disrupted many lives, including those of financial advisors and their clients. Frances McMorris writes for OnWallStreet.com about how financial advisors can help their customers during this time.

The first step is to get in touch with your customers and make sure they are okay. McMorris says that after Hurricane Irene, “the advisors who checked on their elderly clients” helped build “more trust; who created stronger bonds and lasting relationships” with those customers. She said that one advisory team even sent out pizzas to a client after Hurricane Irene to make sure he had “comfort food.”

McMorris says that in the financial advisory industry, people talk a lot about getting trust built with clients, and that the hurricane situation is something where you can make a real difference. “Showing concern during difficult times for clients can make an advisor stand out from all the others,” she writes.

Of course, financial advisors need to make sure that they and their families are taken care of first. But after that, they can help out clients and make sure that they are doing fine after the hurricane, and offer assistance if they are not.

Written by Lisa Swan

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