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Advisers Use Wall Street Protests to Advertise Services

Friday, 28 Oct 2011 01:26 PM

While the Occupy Wall Street protests have been a thorn in the side to much of the financial services industry, independent advisers are using the backlash to tout their services.

Across smaller U.S. cities and towns, independent advisers are using the protests as a talking point to potential clients and reinforcing one simple message: We are not them.

"We are making a bigger point to position our firm as Main Street, not ... Wall Street," said Marla Mason, vice president at Presidential Brokerage, a Greenwood Village, Colorado-based registered investment adviser with $400 million in assets under management.

Mason, who also provides on-air market updates to four local radio stations, has been using air time to distance her firm from the big Wall Street banks. She's telling listeners and clients that her firm isn't "beholden to any big investment bank."

Advisers are setting up a clear dichotomy between their role and that of many brokers at big Wall Street firms, whose goal is to sell the firm's products, not to look out for the clients' best interests.

"Clients are asking us where we stand in and we tell them that people on Wall Street are not necessarily fiduciaries, but we are," said Cindy Golub, a principal at G-Squared Advisory, a Westchester, New York-based financial planning firm. "We aren't the fat cats on Wall Street."

For years, independent registered investment advisers have promoted the idea that they are held to a higher fiduciary standard, under which they must recommend only investments that are in a client's best interests whether it makes the adviser the most money or not. Brokers, on the other hand, are only required to recommend investments that are "suitable" for clients, based on factors such as age and risk tolerance. That means a broker can push products that pay bigger fees than others, regardless of the best interest of a client.

That's not exactly scintillating conversation most of the time. Advisers say that in the past clients would barely pay attention to such explanations. But the long protest in New York City -- at 41 days and counting -- that has spread to other states and countries has changed that.

"We are having more conversations about the protests and it's a great lead-in to this discussion about what (fiduciary) means," Golub said.

Clients are now expressing concern about how advisers are paid and are asking questions about conflicts of interest, said Samuel Scott, Sunrise Advisors Inc., a Leawood, Kansas-based registered investment adviser with $225 million in assets under management.

Investors, sparked partly by the protests, are also asking more in-depth questions when looking for an adviser, said Samantha Craig Vient, a certified financial planner with Craig & Associates LLP, an Orange, California-based registered investment adviser.

Over the past few weeks, Vient said she has received more calls from prospective clients pressing her to prove her independence and asking for details about how she gets paid. In the past she would be the one who had to brind up what it meant to be independent and fee-based.

"Now investors have clearly done their homework," she said.

Some advisers are going so far as to show support for protesters and sending a second message: We are with you.

The Goldman Sachs Group withdrew its sponsorship of a credit union fund-raising dinner last week because it was honoring Occupy Wall Street. Frank Congemi, an LPL Financial LLC adviser, quickly stepped in and agreed to pay the $5,000 sponsorship.

"I am doing this because this is something my clients would want me to do," said Congemi, who manages $70 million in assets. "They want me to do anything I can to get us out of this mess."

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