SIFMA Private Client Conference
Chicago, Ill
Thursday, April 25, 2013
Welcome and Opening Remarks
As prepared for delivery
Randy Snook
Executive Vice President, SIFMA
Thank you John, and once again, welcome to SIFMA’s Annual Private Client Conference.
This event is critically important for SIFMA as it addresses the cornerstone of our industry – which
is our relationship with the individual investor. Trust and confidence in our nation’s financial
markets begins with the individuals who choose to invest their hard-earned money in a system that
they believe can work for them. Investor confidence is essential to keeping markets functioning
efficiently and enables all of you in this room to best serve your clients as you seek to help them
achieve their financial goals.
It’s been nearly five years since the financial crisis shook investor confidence and one thing is
certain: this is not the same financial industry as 2008. Firms are better capitalized and more resilient,
with a greater focus on risk management, and we’re about half-way through implementation of the
Dodd-Frank Act, which the most significant overhaul of the industry since the Great Depression.
Yet while much has changed, we know that we still have work to do to fully restore confidence in
our markets and to enhance the relationship with individual investors.
That is why this event is so important. Those of you here today are on the front lines with individual
investors – you are at the heart of this relationship and have real connections with your clients as
you work to help them save for retirement, a college education or whatever their goals may be. You
put a name and a face on the industry, and your efforts to put clients first and earn their trust
through your actions are vital to overall confidence in the financial system.
SIFMA is committed to providing this forum for you to get together with colleagues to be educated
on pressing industry issues and share best practices that empower you to deliver better results to
your clients. SIFMA’s Private Client Group runs the spectrum and is focused on global, regional,
and small firms, and covers both the employee and independent contractor distribution model, as
well as online, self-directed brokerage. In fact, we facilitate over 17 subgroups of professionals, or
roundtables as we refer to them, that provide an outlet for meaningful dialogue on a range of issues.
We break these down by function, product, or firm size., and include:
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Two Private Client Managers' Roundtables
Alternative Investments Roundtable
CEO Roundtables for both Regional and Small firms
CFO Roundtable
Credit & Lending Services Roundtable
Due Diligence
ETF Roundtable
Insurance/Annuity Supervisors' Roundtable
Marketing Managers' Roundtable
Mutual Fund Business Roundtable
Private Client Supervisors' Roundtable
Regional Equity Capital Markets Roundtable
Online Brokerage
Social Media Roundtable
Wealth Strategies Roundtable
Collectively, SIFMA’s Private Client effort has been focused on supporting responsible regulatory
and business practices that put investors first.
SIFMA has long supported a uniform fiduciary standard for broker-dealers and investment advisers
who provide personalized investment advice to retail clients. Our investor’s best interests should be
put first, so any new standard must be business model neutral, preserving client choice and keeping
their costs low.
In order for any uniform fiduciary standard to be effective, there must be uniform oversight and
enforcement of the rule among brokers and advisers. Currently, brokers are audited by FINRA on a
regular basis, while the SEC simply does not have the capacity to regularly review RIAs, who are
audited only once every 11 years on average. RIAs must be subject to greater oversight and
enforcement, which is why SIFMA is advocating for a self-regulatory organization (SRO) with
oversight over RIAs to further enhance investor protection and ensure the integrity of any uniform
fiduciary standard.
Another tenet of a uniform fiduciary standard of care for both registered representatives and
registered investment advisors is necessary and adequate disclosure. In recent comments to FINRA,
SIFMA noted our support for disclosure of conflicts of interest when a registered representative is
paid enhanced compensation as a recruitment incentive. We believe that investors should know up
front about any potential conflicts of interest, and those disclosures should be in clear, plain English.
We also believe that investors and the industry would benefit if FINRA worked with the industry to
create a model approach that clearly articulates appropriate disclosure.
We are also committed to providing constructive feedback on practices that we feel will have
negative consequences for investors and the economy as a whole.
We are closely watching the Department of Labor’s actions to redefine who is considered a fiduciary
under ERISA. The DOL’s initial proposal would expand the definition in a manner that would
undermine efforts to educate workers on the importance of responsible retirement planning, and
limit investment choices and drive up costs for the individual investors they are trying to protect.
Additionally, SIFMA has been a vocal advocate for tax practices that help all investors. We’ve
pushed for parity on capital gains and dividend rates that will encourage investment, and we’ve been
firm in our opposition to any type of financial transaction tax that will only increase costs for
everyday investors. After years of working to make financial markets accessible and efficient, illadvised tax practices would only reverse this progress and place an unnecessary burden on our
economy.
Looking forward, SIFMA is committed to working with regulators and all of you here today to
advance practices that enhance trust and confidence in the financial system and help strengthen the
relationship with the individual investors who are the backbone of our markets.
With that, I would like to once again thank our sponsors for their generous support of today’s event
and thank all of you for joining us here today. It is now my pleasure to introduce Steve Samuels,
managing director, Global Advisor Communications at Bank of America Merrill Lynch, who will
give the conference overview. Steve, I’d like to personally thank you for your invaluable
contributions to SIFMA and to this event. You have been a strong supporter of the Private Client
Group at SIFMA for many years, including two years at Co-Chairman of the Private Client Services
Committee. Ladies and gentlemen, please welcome Steve Samuels.