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October 14, 2005
Is snooping" good or bad?, Fri, Oct. 14, 2005, 11:28 AM
I received the following mail this morning from Registered Rep Magazine (Branch Manager's Letter), which goes to people on the Sell Side. When I was in the industry, I considered it well-written advice, and I still read it on occasion.
This article, however, got me to thinking how offside the Sell Side has gotten. You read it first, and then I'll give my take.
Branch managers and OSJs are snooping on their FAs.
By Kristen French
A recent NASD arbitration panel decision highlights a conflict inherent in the job of the branch office manager: If a branch manager or OSJ is doing his job right, he could risk losing his firm's clients. That's especially true in today's regulatory environment. With BOMs and OSJs being held personally responsible for broker fraud -- as the recent Raymond James-Dennis Herula case indicates -- snooping may become a bigger part of the job. And snooping can scare clients.
In a Sept. 1 decision made public just last week, a NASD arbitration panel fined Wachovia Securities close to $1 million for firing California branch manager Jim Mehall after he refused to cease his compliance reviews of stockbrokers. Mehall's reviews entailed calling the brokers' clients, something the brokers complained about to the regional manager, who then asked Mehall to stop.
"We were very disappointed in that decision and felt it really didn't reflect the facts as they were presented," says a Wachovia spokesman of the case. Mehall did not return calls seeking comment.
If the contract with the client is to advise them as a professional would, why would the client ever feel that a supervisor was snooping? If it were me as the client, I'd want the whole damn firm to know what their representatives were advising me. In fact, I'd only be spooked if I thought nobody was supervising my Advisor.
As to Wachovia's comments, maybe they have a point " I don't know the case " but it smacks of someone's refusal to acknowledge that the client is not being advised at all, but being sold to, and that whatever works for the sales rep works for the senior officers who get bonused on sales performance, not client portfolio performance.
If I'm wrong on this one, so be it. But I think the Self-Regulatory Organization NASD arbitration panel has come to a good decision.
Can you imagine the decision that Eliot Spitzer might have come to?
Posted by Posted by Bill Cara on October 14, 2005 11:29:25 AM | Category: Yada yada