Press Releasestag:www.vestment.net,2008:/press/news//22007-05-10T12:59:35ZMovable Type 3.34Financial Advisors Are Struggling With Compliance And Legal Issues: Study shows loss of production and fear of lawsuits are a concern to advisorstag:www.vestment.net,2007:/press/news//2.192007-05-11T00:49:12Z2007-05-10T12:59:35ZNEWS FOR IMMEDIATE RELEASE Contact: Benjamin Lewis Perception, Inc. 301-963-7555 Financial Advisors Are Struggling With Compliance And Legal Issues: Study shows loss of production and fear of lawsuits are a concern to advisors Minneapolis, MN (May 10, 2007) – Nearly...
NEWS FOR IMMEDIATE RELEASE
Contact: Benjamin Lewis Perception, Inc.
301-963-7555
Financial Advisors Are Struggling With Compliance And Legal Issues: Study shows loss of production and fear of lawsuits are a concern to advisors
Minneapolis, MN (May 10, 2007) – Nearly 13% of registered representatives are losing at least one full day of production each week due to compliance issues and paperwork, according to a new study of 100 financial advisors by Katherine Vessenes of Vestment Advisors, Inc. of Minneapolis, MN.
The 2007 Financial Advisor Compliance and Legal Concerns Survey – conducted by Katherine Vessenes, President of Vestment Advisors, Inc. – asked 100 financial advisors around the country a series of questions regarding compliance concerns, their view on the quality of their internal and external compliance departments, and how they would change the compliance departments for the better. The respondents to the survey represent 48 different broker/dealers.
The survey revealed that 39 percent of all respondents are troubled by the amount of paperwork that must be completed to meet compliance standards. At the same time, only 7 percent of respondents are worried about the use of variable annuities – surprising considering the run of poor publicity garnered by the use of such products. “In our work with financial advisors and broker/dealers, we have found more and more people struggling to keep up with the amount of paperwork they must complete on a regular basis,” said Katherine Vessenes. “No wonder advisors are spending so much time dealing with compliance issues. Of course, if they are dealing with compliance they are not meeting with a client—which means it is going to eat into production, sales and bottom line.”
Perhaps the most troubling of all data collected is the 39 percent who indicated they have been told by compliance officers they cannot engage in an activity the advisor knew is both legal and within regulations. “This has become such a common complaint that I think it needs to be addressed in the industry,” asserts Vessenes. “One possible reason is that it is difficult to get experienced and competent compliance personnel. So possibly these incorrect edicts are the results of newer, under trained compliance staff. On the other hand, you might have a broker dealer who has been burned many times in the past and has decided to take the rules, and then tighten them even more, to protect themselves. Either way it is confusing to registered reps and not necessarily helpful to the investors.”
When respondents were asked what they would change about their compliance department, the answers provided some startling results. One advisor answered the question with, “The cost for compliance is over 7 percent of our gross revenue. This is more than we pay for rent.” Another advisors said, “When a rejection is issued I'd appreciate an explanation of why the rejection was issued and help/advise with restructuring to both comply with the regulations and help me accomplish what I want to do.” “Many of the answers indicated the industry’s compliance departments can be out of sink with the financial advisors,” said Vessenes. “This kind of confusion gives the industry a bad name and may not be protecting the investor,” she said.
Members of the media are invited to secure a copy of the 2007 Financial Advisor Compliance and Legal Concerns Survey Report, or can arrange interviews with Katherine Vessenes, by contacting Benjamin Lewis of Perception, Inc. at 301-963-7555 or benjamin.lewis@perceptiononline.com.
ABOUT VESTMENT ADVISORS, INC.
Katherine Vessenes is America’s best known authority on the legal, ethical and compliance issues of Financial Advisors (Bloomberg Press) and the author of two books on this topic: Protecting Your Practice and the Compliance and Liability Handbook. Vestment Advisors in Minneapolis, MN, is an exclusive consulting and training firm to the financial services industry because of their unique understanding of the “bumper-to-bumper” needs of today’s financial professional. Vestment Advisors offers clients an unrivaled menu of services that address all eight business disciplines, including compliance, sales and client experience strategies, fiscal management, strategic marketing, organizational development, human resources, technology, and strategic planning.
Please visit www.vestmentadvisors.com for more information.
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