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Newsletters>
May Newsletter
May 1, 2007
Growing Financial Services Market Share
This educational, entertaining and
energizing program will focus on reengineering your mindset
about what it takes to be successful marketing financial
services. In addition, special attention will be placed on
old brain selling, something new to most salespeople.
Further, the session will cover the three Ds of marketing
financial services. Attendees should leave with invaluable
insight into selling more by selling less.
Presentation by John O’Malley of Strategic Visions, Inc.
Meeting time Thursday, May 17, 11:30 AM- 1:00 PM
1 hour CE applied for
$20 members / $25 non-members
RSVP by Monday, May 14, 2007 to Sarah at
fpa_na@bellsouth.net
President’s Message
Michelle G. Carney, CFP®
I am excited to report we had record attendance at our
April meeting. Thank you to all who worked hard to put the
program on distribution planning together. Vestavia
Country Club was turned into a television studio with
video equipment allowing those in Huntsville to view the
program. Look for satellite meetings in additional cities
soon.
Our project with Pathways Women’s Shelter is well on its
way and in need of your help. A group of our members have
developed a curriculum for the women and children in the
shelter. The curriculum provides a great overview of
personal finances- including budgeting, banking,
insurance, and investments. We need your help to teach
these classes. Your commitment would be two evening
classes- observing and assisting with one class and
teaching another with the prepared lesson plans. The
classes will be held in the evenings at Pathways. We all
have the chance to change our client’s lives everyday- this
is a chance to really make a difference in lives that do
not have access to our services. We will be having an
informational meeting in June for all those that are
interested. Please let Eric McClain (eric@fopp.net) or me
(mcarney@kassouf.com) know if you are interested or have
any questions. We need you!
I look forward to seeing all of you on May 17th for our
annual practice management meeting. This year our focus is
on marketing. It will be a great chance to hear from
professionals about the best uses of your marketing dollars
to position yourself and your firm. Please also mark your
calendars for our first compliance seminar to be held June
21st from 1:30-5:00pm at Vestavia Country Club.
Michelle
Truth, Justice and the American Way
Kendall W. Maddox, JD, LL.M, cfp®
Merrill Lynch Rule Struck Down
The U.S. Court of Appeals for the DC Circuit on March 30,
2007 vacated the SEC rule exempting broker/dealers from the
registration and fiduciary requirements of the Investment
Advisor Act of 1940 (“IAA”), the so called “Merrill Rule.”
On April 12, 2005, the SEC adopted a final rule to broaden
the exemption of broker/dealers from the registration
requirements of the IAA. Under the Merrill Rule,
broker/dealers could provide investment advice for a fee,
subject to certain disclosures, without being subject to
the fiduciary requirements of the IAA.
The Court stated the SEC exceeded its rule making
authority. The IAA specifically exempts a broker/dealer
from registration as an investment advisor provided the
advice is “solely incidental” to the brokerage transaction,
and the broker/dealer does not receive “special
compensation” for the advice. The exemption is one of five
enumerated exemptions. The IAA, however, authorizes the
SEC to exempt from registration under the act “such other
persons not within the intent of this paragraph…” (Emphasis
added).
The Court used classic statutory construction in striking
the rule. The court found the SEC failed to meet either of
the two requirements Congress permitted to extend
exemption. First, Congress specifically addressed the
exemption afforded broker/dealers under the IAA, by
affording them an exemption for advice incidental to the
transaction and without additional compensation.
Consequently, broker/dealers are not “other persons” under
the SEC’s rule making authority, and the SEC may not
establish a new, broader exemption for broker/dealers.
Second, the Court looked to the legislative history of the
IAA to determine that Congressional intent does not support
an exemption for broker/dealers broader than the exemption
expressly set forth in the IAA.
The FPA believes the SEC is unlikely to appeal the
decision. Even if an appeal is filed, it is likely the
Supreme Court will decline to hear the appeal. The FPA
believes the next battleground will be in Congress. It is
expected that the Securities Industry and Financial Markets
Association (SIFMA) will lobby Congress to amend the IAA to
codify the Merrill Rule.
Coming Next Month
How To Survive Joe Borg
Rena Davis and Lisa Toler, officers from the Alabama
Securities Commission will discuss the “Nuts and Bolts of
Compliance.”
-What files should we have
-How to organize files
-Paper vs. electronic files
-What should be in the Compliance Manual
-How should we record complaints and what do we do with
them
-How long files are to be kept
David Grace of Interactive Advisor Software will discuss
how software can be used to help with
Compliance.
June 21, 2007, 1:30PM-5:00PM, Applying for 3 hours of CE
credit
Please thank our 2007 Partners
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