Homepage / Investment / The ‘broker protocol’ is good for investors and needs to be strengthened
Amazon says this Prime Day was its biggest shopping event ever Kudlow says President Trump is 'so dissatisfied' with China trade talks that he is keeping the pressure on As stocks regain their footing, an ominous warning looms Goldman Sachs downgrades Clorox to sell, says valuation is 'unsustainably high' How Satya Nadella has spurred a tripling of Microsoft's stock price in just over four years Kudlow says economic growth could top 4% for 'a quarter or two,' more tax cuts could be coming The one chart that explains Netflix’s stunning comeback US housing starts plunge 12% in June to a nine-month low Aerospace titans Boeing and Airbus top $110 billion in orders at Farnborough Target uses Prime Day to its advantage, logging its 'biggest online shopping day' so far this year Billionaire Marc Lasry sees bitcoin reaching up to $40,000 as it becomes more mainstream and easier to trade These are the 10 US airports where you're most likely to be hacked Amazon shares slightly higher as investors await Prime Day results Wreck of Russian warship found, believed to hold gold worth $130 billion A bullish ‘phenomenon’ in bond market is weeks away from fading, top credit strategist says Stocks making the biggest moves premarket: MS, GOOGL, TXN, UAL, NFLX & more Twitter shares up 50% since late April means most upside priced in, analyst says in downgrade EU fines Google $5 billion over Android antitrust abuse Mortgage applications fall 2.5% as buyers struggle to find affordable homes America may not have the tools to counter the next financial crisis, warn Bernanke, Geithner and Paulson Investors are getting spooked as the risk of a no-deal Brexit rises EU expected to fine Google $5 billion over Android antitrust abuse Ex-FBI chief James Comey urges Americans to vote for Democrats in midterm elections Elon Musk apologizes to British cave diver following baseless 'pedo guy' claim Disney, Comcast and Fox: All you need to know about one of the biggest media battles ever Xiaomi shares notch new high after Hong Kong, mainland China stock exchanges reach agreement The trade war is complicating China's efforts to fix its economy European markets set for a strong open amid earnings; Google in focus Hedge fund billionaire Einhorn places sixth in major poker tournament The biggest spender of political ads on Facebook? President Trump Asian stocks poised to gain after Fed's Powell gives upbeat comments; dollar firmer Stocks are setting up to break to new highs Not all FAANG stocks are created equal EU ruling may be too little, too late to stop Google's mobile dominance Cramer explains how Netflix's stock managed to taper its drop after disappointing on earnings Airbnb condemns New York City's 'bellhop politics,' threatens legal retaliation Amazon sellers say they were unfairly suspended right before Prime Day, and now have two bad choices Investor explains why 'duller' tech stocks can have better returns than 'high-flying' tech names Elon Musk is 'thin-skinned and short-tempered,' says tech VC Texas Instruments CEO Brian Crutcher resigns for violating code of conduct Google Cloud Platform fixes issues that took down Spotify, Snapchat and other popular sites Uber exec: We want to become the 'one stop' transportation app 'What a dumb hearing,' says Democrat as Congress grills tech companies on conservative bias Amazon shares rebound, report says Prime Day sales jumped 89 percent in first 12 hours of the event How to put your medical history on your iPhone in less than 5 minutes Investment chief: Watch these two big events in 2018 Even with Netflix slowing, the market rally is likely not over Cramer: Netflix subscriber weakness debunks the 'sky's the limit' theory on the stock Netflix is looking at watch time as a new area of growth, but the competition is stiff Why Nobel laureate Richard Thaler follows Warren Buffett's advice to avoid bitcoin Rolls-Royce is developing tiny 'cockroach' robots to crawl in and fix airplane engines After Netflix plunge, Wall Street analysts forecast just tame returns ahead for the once high-flying FANG group Roku shares rise after analyst raises streaming video company's price target due to customer growth China is investing 9 times more into Europe than into North America, report reveals Amazon says US Prime Day sales 'so far bigger than ever' as glitch is resolved Netflix is on pace for its worst day in two years US lumber producers see huge opportunity, rush to expand San Francisco to consider tax on companies to help homeless Homebuilder sentiment, still high, stalls as tariffs, labor and land drive up costs Powell backs more rate hikes as economy growing 'considerably stronger' Netflix history is filled with big stock declines – like today – followed by bigger rebounds Intel shares get downgraded by Evercore ISI due to rising competition from Nvidia, AMD Petco aims to reinvent the pet store with something you can't buy online Genetic testing is coming of age, but for consumers it's buyer beware Tech 'FAANG' was the most-crowded trade in the world heading into the Netflix implosion, survey shows Netflix weak subscriber growth may indicate a 'maturity wall' that could whack the stock even more: Analyst This chart may be predicting the bull market's demise Wall Street says Netflix's stock plunge is a ‘compelling’ buying opportunity because the streaming giant ‘never misses twice’ Tesla sinks after Musk tweets, again Boeing announces new division devoted to flying taxis Stocks making the biggest move premarket: NFLX, UNH, GS, AMZN, WMT & more Deutsche Bank downgrades Netflix, but says big subscriber miss is not 'thesis changing' IBM is experimenting with a cryptocurrency that’s pegged to the US dollar North Korea and Zimbabwe: A friendship explained Virgin Galactic spinoff Orbit to launch rockets from the UK with space deal Artificial intelligence will create more jobs than it destroys? That’s what PwC says ‘Treasonous’ Trump and ‘Putin’s poodle:' Scathing headlines follow the Trump-Putin summit China’s fintech companies offer ‘enormous’ opportunity, investment manager says Trump's performance at summit with Putin was 'unprecedented,' experts say Walmart and Microsoft link up on cloud technology as they both battle Amazon European stocks seen mixed amid earnings; Fed’s Powell to address Congress How I knew I should quit my day job and run my start-up full-time: Viral website founder China's stocks have been trounced, but the trade war may ultimately be good news for those shares Billionaire tech investor Peter Thiel bets on crypto start-up Block.one Asian shares subdued open after mixed close on Wall Street; energy stocks under pressure Amazon cloud hits snags after Amazon Prime Day downtime Netflix isn't doomed by one quarter unless people start questioning the long-term investor thesis Tech stocks set to sink on Tuesday after rough evening for ‘FANG’ Netflix plummets after missing big on subscriber growth This wristband lets humans control machines with their minds The U.S. has a rocky history convincing Russia to extradite computer criminals Amazon suffers glitches at the start of Prime Day Jeff Bezos is now the richest man in modern history 'The United States has been foolish': Read Trump and Putin's full exchange Goldman Sachs recommends these 5 highly profitable companies — including Nvidia — to combat rising inflation Goldman Sachs releases 'tactical' stock picks for this earnings season Three red flags for Netflix ahead of its earnings report The bond market may be raising recession fears, but don't expect one anytime soon Cramer: Banks are 'making fortunes' but are still as hated as they were during the financial crisis Putin told Trump at summit: Russia never meddled in US election


The ‘broker protocol’ is good for investors and needs to be strengthened

I have long believed that to be a financial advisor is to serve in a noble profession.

In fact, given the impact finances can have on our lives, I consider the financial advisory profession approaching the importance of what physicians may do to positively impact patients’ physical and mental well-being, or what clergy do to positively impact the spiritual well-being of people of faith. As financial advisors, we have a tremendous opportunity and, similarly, a tremendous responsibility to positively impact our clients’ financial well-being.

That may seem hyperbolic or even disingenuous to those who view our profession with mistrust. And I can understand that, given the approach of some in our profession or, better said, our industry. My terminology changes to “industry” because, sadly, that’s the opinion of some financial services firms: They instead consider this an industry in which you are either a manufacturer of products or a distributor of products that they or someone else manufacture.

That’s not the profession as I see it. Rather, this is a profession that is about people and their financial well-being. The best advisors truly understand their clients and their financial situations, and help them make decisions to achieve their life goals.

Which is why it pains me as I witness our profession’s Protocol for Broker Recruiting start to unravel. For those unfamiliar with the protocol, it is an agreement — struck more than a decade ago between most financial services firms, big and small — that allows financial advisors to bring a limited amount of client contact information with them if they choose to change firms, so they can contact their clients and continue to provide advice and service once they have joined the new firm.

More from Investor Toolkit:
Advisors turn to life coaches and counselors
Retirees leave $100B in Social Security benefits on table
How much those advisor fees are costing you

While I’d argue that the protocol doesn’t go far enough, given that advisors can’t explain their plans to clients ahead of time — often creating confusion when an advisor is suddenly at a new firm without warning — some firms have recently decided that the parameters of the protocol are too much. In our industry’s equivalent of Brexit, two large signatories have exited the agreement.

These firms have decided to build walls around their advisors, making it harder for them to leave if they choose to do so.

Raymond James is a member of the protocol and intends to remain. We believe in freedom and the power of choice. We believe we should aspire to support our advisors so well — add so much value to how our advisors positively impact their clients’ lives — that our advisors would never dream of serving their clients from another home.

Most importantly, we believe the client relationship is first and foremost with the advisor, not the firm. This goes far beyond protocol, to what we call “book ownership.” Again, protocol simply means advisors can bring a limited amount of contact information and solicit their clients, but stops well short of embracing freedom and choice of firm for advisors.

Book ownership acknowledges that the advisor, not the firm, has earned the client’s trust and has built that relationship over time. So if an advisor decides a new home would better support their clients and their business, we’ll help them transition. Clients should be able to choose their advisors and advisors should be able to choose their firms. These are people, not commodities.

Which brings me back to my belief that this is a noble profession. We should strive for more. In the medical profession, when patients choose to follow their physicians to a new hospital, they request that their medical records follow from the old hospital to the new one. This strikes me as commonsense, yet in our industry it doesn’t happen.

The best case is that both firms involved in an advisor transition are members of the protocol, so the advisor can bring client contact information and call his or her clients. If the firms are not members, clients are often left confused or angry — they don’t hear from their advisor and get redirected to someone new when they call, all while the advisor is trying to slowly rebuild a contact list. This does not reflect well on any of us and contributes to the distrust that some have for our profession.

Clients expect and deserve more. We should be able to deliver. But in order to do so, we have to rethink our approach — step away from the idea of being an industry and live up to being a profession; set aside lip service about putting clients first and actually do it. That means letting clients choose their advisors. Letting advisors choose the best firms. Letting information flow securely and confidentially to a new firm at the direction of a client so the advisor can provide continuity of advice and care.

It’s time for our industry — our profession — to evolve. The current broker protocol is a bare minimum. Rather than abandoning it, let’s strengthen it. Let’s work together to keep clients at the forefront by honoring the client-advisor relationship. Let’s actively work to serve our advisors and their clients to make them want to stay. We’ll all be better for it. That’s good for each of our firms, for the people we serve and for our firms’ shareholders.

— By Tash Elwyn, president of Raymond James & Associate Private Client Group

Source: Investment Cnbc
The ‘broker protocol’ is good for investors and needs to be strengthened

Comments are closed.