44 INVESTMENT ADVISOR SEPTEMBER 2019 | ThinkAdvisor.com
have to be able to automate that decision
tree for them. That’s where the biggest
game changer is for advisor behavior.
Dolber: I’m a bit concerned about the
states. There’s no real harmony with this
whole thing. Some of the states definitely have their own ideas about it. You
would think that all regulators would
come together and be harmonized on
this — from FINRA to the SEC to the
state regulators. Can’t we can adopt one
rule? Wouldn’t that be nice?
Webber: That would be nice. I don’t
think that’s where we’re headed.
Dolber: There are some states that
have completely different ideas about
this. So the states are flexing their muscles and their authority. You could be
complying with the SEC but you may
not be compliant with the state.
Webber: There are at least four of
them out there. That’s also the risk committee’s role — to settle the differences
between what the states rule, when they
are finalized, and how to comply.
DeVito: We have the SEC, FINRA
and multiple districts that interpret
things differently. We had 50 insurance divisions and the states that can
go after you.
Stringer: Kind of like with alternative
products. Massachusetts set this bar on
how much you can put into them. You could deal with this
patchwork of different nuanced fiduciary rules and just go to
the lowest common denominator.
It would be nice for the end investor not to deal with
these different standards. I mean the whole point of this
standard dialogue is to create a uniform standard that we
can all live with.
Dolber: Do the [investor] clients understand the difference
between the suitability standards? Most clients still probably
won’t understand the difference. They’ll say, “Well, I figured
you always act in my best interest.”
Stringer: We built a quantitative analysis tool for our advisors. If you’re going to do an exchange or put this product in
there and sell that product, do the math calculator. You can see
if it’s in the client’s best interest from a cost perspective. That
seems to be the primary lens the regulators see.
Dolber: What happens when they start looking at performance? That’s the next step — to analyze cost against
Prospera Financial Services
President & Principal David Stringer
Years in Business 37
Producing Reps 127
Average Annual Gross
Production per Rep $458,000
2018 BD Gross
Revenue $54.0 million
Company data self-reported as of Dec. 31, 2018