http://www.advisorfreedom.comAdvisor FreedomI think I'm going to stop writing this blog because it's apparent that no one heeds the warnings about the future of the industry that come from it despite being right most of the time..  I have been preaching for months that Mary Shapiro and company were going to control the RIA business before it was over. I thought she would do it by lobbying for the RIA's to be placed under her control if Chris Cox stayed in as SEC Director.  As I talked around the country on this topic, every now and then a rep or a BD head would come up and say, "Really, do you  think it will come to that?  "Gosh, I don't see how she could do that:  Do you think this means "President's Club will go away?"  President's Club will be the least of your worries in the future under Mary. In the new environment, Treasury Rules, the SEC is their enforcer, and the industry associations and trade groups have as much clout as Homeowner Associations. Here's a stronger message for you independent RIA's with IQ's above tepid water..  WAKE THE HELL UP!.  This is the end of the investment advisory business the way you understand it.  Mary will take the same "take no prisoners, arrogant, "I know what's best" attitude she brought to FINRA and use it to destroy the last source of objective investment advice that consumers have.  Before it's over, your font size, office decor, rest room tissue, and lunches will all have to be approved by Mary in advance.  If you think your life is tough now, wait until this myopic regulatory monster gets in full control.  I have watched her drive people out of the industry and sell practices in droves in the last 8 years.  The only thing Mary has furthered is her own future. Her expertise in this area should get her a lifetime achievement Award. from the CFP Board, who, by the way, may only be giving out awards as their sole function going forward.. It's clear they've done nothing to protect your future. Disband the entire organiztion and let them  raise money for snackpacks for Darfur.  The Financial Services Industry under Mary is the new France from a regulatory standpoint and the new Auschwitz from a practioners standpoint.. Mary is a Bureaucrat who believes that more rules and bureaucracy are the answer to protecting the American Investor.  Like a carpenter whose only tool is a hammer, eveything looks like a nail to her..  At this moment her arrogance, outdated view of the industry and technological unawareness poses the single greatest threat to the financial future of the American public and to your future as an industry practioner. She and her new team of hanger ons and syncophants will bully and cajole the BD Exec Cowards into the position she wants them in.  Shame on them and shame on you for following them. Here's what I think you should do:  If you have a practice and it is profitable,  SELL IT.. You have no profession nor independence left once this monster gets in.  10% of your time will be spent in compliance issues and the remainder will be spent looking for explosive devices under your car. Don't worry about what you will do.  Find a job, buy a franchise, find something that lets you  get paid to pick up shit with your hands.  Buy foreclosed houses, run coke out of Chile, do anything but stay in the industry. Open a gravel pit or landfill. Pick up roadkill.  Find dead deer on the side of the road and turn them into ottoman's or mocassins..  Become a bountyhunter.  Get a UPS route. Mary will do a sweep of RIA practices in her first year and I promise you that your sweet 1% AUM fee will be gone .  No longer will you be able to clip coupons for making phone calls and saying the market is "Up or down"or the ever reassurring,  "It will come back".  With all due respect to John bowen, you will need to come up with a different line of reasoning for why you get paid 1% on accounts that are going down.  It's sort of like a hospital charging an access tax levied on your property just in case you ever need them.  I you wait to sell your practice down the road as your personal retirement hedge, then plan on stopping by the gun shop and Wine Store to supplement your ideas. All your private investments from pension plans to amway businesses will be under scrutiny.  Your personal financial affairs will have as much privacy as an outhouse on a freeway.  This is Putin's Russia without the kindness. Drop your membership and your designation in the CFP Association and the Amerian College.  the only certification that will matter going forward is that you are regulated, licensed and in good standing..  Mary will have a  new standard and it will not include  a12 book course on "What is a stock and what is a bond" with a test attached..  Forget about being a Fiduciary as a standard.  Your new standard of worthiness will be whether you get invited up to the Big House for dinner.  Practice your "Yes, Miz Shapiro, NO Mz Shapiro" before you go to dinner.  Your U-4 will be the Mark of the Beast. Barack has made a huge mistake here.  His academic simplemindedness and lack of understanding about entreprenurism in the industry has led him to this decision. Because he is a career bureaucrat and academician and so afraid of going back to the plantation, he is surrounding himself with bureaucrats and plantation owners. Mary will regulate the rest of the capital markets business out of existence in less than four years.  Barack   is clueless about capitalism and this decision shows he's clueless about the industry.  Mary being in charge of this industry  is as ridiculous  as having a KKK Member in charge of the NAACP. Set up your business in Belize, Antiqua, Nevis, or south Africa.  register as a foreign advisor.  Move to Peru.  Do anthing but subject your business and future to this Moron and her program..  Now would be the time to set up a Somalia Pirates Retirement  Fund.  Now would be a great time to be Somalian Pirate. In al seriousness, here are some steps to take: 1. Organize the entire RIA industry as a Union and get collective bargaining to protect your rights.  You will need thugs to deal with thugs going forward.  since Barack's new Secretary of Labor Candidate has  Union written all over her there is no bettee time for this. All the RIA's should contribut 100K to an RIA Independence fund and sue Mary back into the StoneAge every time she floats a "memorandum to Members"  I hate Unions but I hate despotic regimes even more.  You can always buy the Unions off to get them out. 2. Set up Unique Process businesses as Dan Sullivan suggests before Mary gets into office.  Once she's there you have a greater chance of buying an Apache Attack Helicopter on e-Bay than creating somthing like this.  If you don't know what Unique Process is, get into the Strategic Coach Program and learn how to do it. 3.  Hire great lawers- You are going to need them.  In fact, a bulldog litigator should be your next hire. 4. Go order the entire Creative Destruction Series  from The Strategic Coach.  Dan Sullivan predicted all this five years ago.  Dan has more insight about the future of the industry in his little finger than all the executives and regulators do in all their filing cabinets. By the way, send this to Mary and the head of your BD who has fiddled while this fire was getting going.12/17/2008http://www.advisorfreedom.com/comments.asp?id=225If I read one more column or special feature or emergency release about the death of capitalism, America, and our way of life, I just might kill myself.  As I've clipped the headlines over the last two years, the only conclusion I can come to about the writing that I'm reading is that we need fewer newspapers to deliver the bad news since all of the stories are essentially reprints off AP or Reuters or Bloomberg and that those same papers should hire journalists who have an undestanding of economics and history that go back further than the most recent World of WarCraft release. So, my suggestion for the Bad News Bears of Journalism is simply to consolidate all their writings into one collaborative site or newspaper, call it The Armageddon Times, and not worry about objective, factual, reporting and just spew out all their lack of confidence about the future.  They could even have a special comment section called "Sissies Speak" for the really weak and trembling to voice their lack of faith in everything,. Look, here's the thing.  Civilizations, economies, closets, and attics all have to be cleaned out from time to time.  Out with old, in with the new, that sort of thing.  It's good for every one involved as well as the things that get thrown away.  They get recycled, re-used, re-appreciated in some form or another.  It's not that cleaning out things from time to time is difficult, it's just that it's painful.  The pain is what we are trying to avoid.  Lesson here: Opt for short term pain over long term pain. So, here's my list of troubled, clean out spots, and why it's good they are getting thrown in the dumpster: 1. OLD WALL STREET FIRMS-  I dislike old and clubby anything whether it be Wall Street Partnerships or country clubs that exclude everyone but old, rich, white people.  The big firms haven't created any real value in years.  What they've substituted for real value is imaginary calculations on things that might have value if everything gets more and more imaginary.  The map is not the territory and the financial model isn't the investment.  Wall Street as a whole is the new Arthur Anderson.  AA ran out of legitimate ways to bill people so they started inventing stuff to sell that had no value and no legal basis.  The market place caught them and well it should.  Let the major firms fail and let them reorganize themselves. 2. THE AUTOMOBILE INDUSTRY- These guys have only had three decades to get ready for what's happening to them.  They've been working on unrealistic and unsustainable wages and benefits for years, manufacturing multiple lines of products that no one but the poor and old want, and enjoying at the executive level a lifestyle that died for most people at the end of the Medieval Period.  They are still clueless as to what America wants, their design on the new "Green" vehicles totally is without merit, and they have no creative selling strategies other than "Employee Pricing" which is a euphemism for "let's give away our profit so we can get these losers off the lot and make more of them" 3. THE UNIONS-  The Union structure, mindset, and pay schedule is way past its "sell by" date.  The Unions are the old Mob in a statutorily protected structure.  They are economic extortionists and entitlement mentalities who have absolutely no clue as to how the Free Agent world is working much less a desire to transform themselves into that.  If the UAW in Michigan, Ohio, and Illinois had paid more attention to what was going on the world outside of Camp Union, and less time about  when they got off for Deer Season, they would not be so desparate.  You snooze you lose is what's happened to them.  My advice:  Start a business, buy a business, retrain for a new career and get over the illusion that anyone cares about you and your $50 an hour seat installation job. 4. HOUSING- Bankers forgot a fundamental lesson in the last housing boom and that is that builders will build as long as you give them money.  Throw in no accountability financing, package it deceitfully to sell to the world, and issue warm and fuzzy forecasts and you find yourself right where you are now.  Mortgage financing is too important to be left to the banks or Wall Street.  Offer entry level financing, below market rates to qualified people and let them buy the unsold inventory.  The smart ones are going to buy it at foreclosure sales anyway, so just bypass the lawyers, appraisers, title searchers, and get them back in the shelter they need. 5. HIGHER EDUCATION- The value of higher education is being supported by statistics that are as old as the institutions themselves.  The fact of the matter is that those statistics were derived from a time when we all clawed and bit each other over a chance at getting on the corporate ladder. I'm a lawyer who has been self employed for almost 30 years.  I'd rather be a prisoner of war in Iraq than work for a major corporation.  Let's offer Government Financing for young people who submit business plans and who want to be entrepreneurs.  Let's finance vocational school for those who want to learn a trade.  As an owner of a real estate development company I can tell you that the world needs more electricians, plumbers and master carpenters than it does one more Poly Sci major.  The 34 billion we are going to use to bail Auto out would turn into trillions more dollars and hundreds of thousands of more jobs if we invested it into entrepreneurs and not entitlement union programs. The greatest threat to America's future is not terrorism.  It's the NEA. 6. HEALTH CARE- As someone who has just had a malignant brain tumor removed I can attest to the incredible nature of our system.  I walked  to the bathroom one hour after surgery and around the hospital corridor the next day.  I wrote a blog the day after surgery.  At the top end of the system our care, technology, expertise, is at the top of the world.  If you disagree, tell me the place you think provides it better.  Here's my cure:  1. Let WalMart handle primary care in the US., 2. Put a liquidate time stamp on Medicare and just give the drug companies tax credits to offest their loss of revenue, 3. Provide forgivable financing for young people to become nurses, physician's assistants, dentists, and care providers, 4. Create the possiblity for intergenerational health savings accounts that can be invested in anything and take the ceiling off contributions.  5. Set up a Tort Review Board that quickly allows legitimate claims to go through and penalizes the lawyers who file frivolous ones. 6. Limit the number of new law school students. 7. NATIONAL INFRASTRUCTURE- Barack's jobs plan is fundamentally the1930's WPA program repackaged.  If we put the same 3 trillion that we are proposing for the bank bailout into bridges, overpasses, interstates, and tunnels, we keep America employed for decades and we enjoy a smoother ride.  My bet is we can take the Union guys from Detroit and turn them into better bridge builders than car builders.  I'd rather drive a Japanese built Lexus over an American designed highway than vice versa. 8. INCOME TAX AND THE IRS- As a lawyer and taxpayer I have been involved in litigation and disputes with the IRS for nearly 20 years.  I can tell you from my personal experience that they are a deceitful, malicious, extortionist organization that uses terror and the legal system to extort the money it needs.  Get rid of the tax code, institute a national sales tax, and redistribute the billions this organization wastes into more productive areas.  You can always re-employ the IRS agents back into the automobile Unions.  They'll fit right in. Capitalism works.  Sometimes it gets lost a little on its way but it works.  What doesn't work is central planning, protectionism, and false assumptions about the marketplace acted upon.  The world just catches up every now and then and calls time out and  bullshit  on the things that need to be redone.  Let's just let it work the way it's supposed to and keep Congress out of it.  Let them work on saving the Spotted Owl and turning down the world's thermostat one degree.  Big jobs for people who have nothing else to do.. I'll stay here until Al Gore decides to run again.  Then I'm killing the last spotted owl and myself.12/5/2008http://www.advisorfreedom.com/comments.asp?id=224The absolute irrelevance and useless of FINRA in the modern financial services industry is about to come to light as soon as older clients realize you have tanked their futures by following FINRA's boneheaded advice about managing home equity.  Thanks to these bureaucratic morons, advisors have allowed trillions of dollars of equity to evaporate and affected the inheritance potential for millions of Boomers.  I think you need to start ignoring that advice and go on record as advising clients of the perils of not managing their home equity if for nothing else, to have it in the file. YOU may not be able to advise them to take their equity out and put it somewhere else but you can refer them to someone who can.  I promise you as a Lawyer that if I reviewed a file where YOU as the advisor COULD have made a recommendation and didn't, I'm going to collect big time for my client from your E&O Policy.  My position, especially if you are a CFP, is that you have a fiduciary duty to advise your client of all possible strategies to both preserve and grow the asset values in their portfolio. The home equity position is a huge reason to ditch the FINRA licensing and move to an RIA platform where at least you can operate without the antiquated and fear based thinking that drives so much of FINRA's policy making.  One of the reasons FINRA has been so invisible in this financial crisis is that despite all their regulation over the past ten years, the American Investor is no better off than they were but the Advisor is much worse off because of all the additional compliance work placed upon them.  Work, by the way, that keeps FINRA's  audit squads fully employed and wastes an incredible amount of your time. Here's the problem with FINRA's thinking on home equity: 1. It leaves trillions trapped in a non-liquid asset, the home 2. It subjects the asset to claims from creditors like hospitals, merchants, and other vendors 3. It creates a barrier to Medicad accessbility and funding 4. It creates a problem asset for care giving children to deal with' 5. It places the homeowner totally at the mercy of the Banking and Credit Reporting Systems for accessing the money.  Your Fiduciary Duty as an advisor is to make recommendations that provide your client with all the options and information to make an informed decision.  Waive the commissions on products if you have to, but get them to make decisions about this asset. If Mary and the Morons have a problem with this, tell them to come and see me.  I'd love nothing more than to expose their ignorance around this issue to the other regulatory bodies and the American Public.  Can you imagine this headline in USA Today:           FINRA DOOMS SENIORS TO POVERTY WITH TRAPPED HOME EQUITY Don't go to jail on this issue.  Just Cowboy Up and start acting like the Advisor your clients believe you are.  Amateur night is over in the financial services business.12/1/2008http://www.advisorfreedom.com/comments.asp?id=223I've been looking back over the headlines of the last few months and I've discovered at least six new topics for advisors to talk with their clients around.  Each one of these topics could be a brand new area of business income if developed properly.  Worst case, the areas provide a much more future focused perspective than the events currently surrounding us.  Hope you see the same potential as I do. 1. FAMILIES WITH ADULT DISABLED CHILDREN- Whether Sarah Palin is VP or not, she has brought the fact of challenged family members to the national agenda with her new son.  When one in ten families in America has a disabled family member you have to see the huge opportunity here.  Mary Ann Elhert, creator of The Program for Protected Tomorrows, is a nationally recognized expert in this area and has a complete 'plug and play' system for helping advisers work in this area.  Call Mary Ann or visit her website and tell her I told you to go there. 2. PARENT CARE- Caring for aging parents is a lot more involved than just paying their bills and making sure they have food on the table.  An advisor who can step in to relieve some of the pressure and responsibility from Boomers with caring for their parents will position themselves as not only a Trusted Advisor but a Necessary Advisor.  Boomers want to care ABOUT their parents but not FOR their parents.   My program, The Parent Care Solution, is one 'plug and play' capability for advisors to jump right in.  Stop worrying about Mary and the Morons at FINRA in terms of designations and just create or license a capability to help your older clients and their children in this area. 3. HOME EQUITY MANAGEMENT- The recent credit tightening situation, the cyclical drop in real estate values, and the general slowness of transactions in certain areas of the country, have all combined to create an extremely challenging environment for those clients whose net worth is tied up in a primary residence.  While FINRA may have created a 'chilling effect' on discussing this issue with clients, I'm going to tell you that you will be sued by their children for not bringing the need to both monetize and protect this asset, if you allow it to be wasted. 4. PETS- For many Americans, their pets have become the children they never had or the grandchildren that aren't coming for a while.  Pets are a 52 billion dollar a year industry in this country and growing faster than any other consumer category except electronics.  Get involved in discussing Pet Trusts, Pet Agreements, and charitable giving for local animal groups with your clients who have pets and I promise you that you will meet more new and affluent people that you ever imagined.  I have four dogs and two cats and while I wouldn't pick up the phone to listen to new estate tax law changes, I would walk to see you as an advisor if you can help me expand my love and appreciation for pets.  Take a look at www.americanpetcross.com and see how a chapter might fit into your practice community. 5. HEALTHCARE- There are three things that are always talked about in an election year and three things that nothing is ever done about:  HealthCare, Energy, and Defense.  Helping your clients think throught their health care issues and funding for them is one of the great growth areas in planning. 6. RETIREMENT PLANNING- I think this subject is DOA for most Americans in the sense that the realities of the world now suggest that if you are thinking about retiring you will live longer and need more money than you ever suspected.  Use the current environment to revisit this concept with your clients.  Don't scare them by showing them how short they will be. Inspire them with ideas on how to make up the difference.  The old models of conservation of capital and increasing income distributions are going to need some major reshaping...especially for Boomers.  When 60% of Boomers are planning on working 5-10 years longer than they thought, having retirement seminars around old ideas seems to miss the mark. As an advisor you should be watching these areas closely and develop unique capabilities to offer a plan and path for clients to follow or license someone those of someone else..  You should also be aware of the fact that the 1% fee for Assets Under Management, as well as B shares, is rapidly approaching its 'sell by' date. For additional conversation about this, don't hesitate to e-mail me at:    sealone@advisorfreedom.com11/3/2008http://www.advisorfreedom.com/comments.asp?id=221  I have thought for some time now that the only real value that a financial advisor brings to the table is courage.  The market volatility in the past few months has called for great courage on the part of advisors and clients.  But the real courage needed is not to just stay the course.  The real courage is to continue investing when everything tells you not to.  The real danger in the market is not that you will lose money.  That's a given.  The real danger is that you won't be in the market when there's money to be made.  Here are some thoughts for you with your clients: 1. Cash is for the most part, stupid:  Unless you're stockpiling cash for acquistions of on sale assets or planning for capital expenditures, having lots of cash is like hoarding bottles of oxygen in your basement.  The value of cash gets inflated away very, very quickly in circumstances, and not withstanding the FDIC's guarantee of 'insured accounts', try standing in line with 4,000 people on a Monday morning after a Friday drop of 20% in the markets. 2. Keep 12-24 months in Cash- Look, 24 months is a long time.  Anything can happen during that time.  Set up a sinking fund and keep the rest of your money invested.  It's easier to watch consumption when you are pulling down 5k a month from a 120K fund than from a 2 million fund.  The 12-24 months of cash takes your blood pressure down, let's you do some extra things within reason, and lets your portfolio grow. 3. Read, Learn, Attend Classes, Get Prepared for Better times- There has never been a more opportune time to invest in learning.  Go buy an Amazon Kindle and download all the finance books you want to read.  Develop your own PhD in finance.  There's only about half a dozen books that make any difference anyway. 4.  Set up a quarterly meeting or monthly economic summit- Keep giving people reasons to believe in the future by keeping them updated on the present and what it might mean.  Make the group20-50, serve light refreshments, very little alcohol, and fine people to talk that are smart and entertaining.  I'd keep really boring economists, college professors, and Bank Presidents out of the meetings.  In they can't inspire let them expire. 5. Save for the long term but live now- I hate these newspaper articles and TV interviews on 'cutting back".  Listen, three weeks ago the entire world almost melted down financially.  Roughly 100 people running the nation's largest financial firms almost completely tanked your future as well as some of the rest of the world.  Remember, you do not want people walking by your casket and remarking: "I don't understand how this happened because he was on a low carb diet and had a big savings account." 6. Don't listen to people who don't have money- Warren Buffett has done pretty well for a guy from Nebraska.  So, when Warren says something, I'm going to pay more attention than when Nancy Newspaper with her Economics Major and Journalism Minor from the San Antonio Community College of Welding and Global Finance writes about something. 7. Today is the yesterday twenty years from now when you should've bought- No one ever went broke buying things at one price and selling them for a higher price.  In order to do that consistently, you have to know what you are buying and have a sense about the future.  The long term trend of the market is "UP".  The long term trend of housing is "UP".  The long term trend of your life is "UP".  The spikes either up or down are just that....spikes.  Build a bridge....get over it. 8. Don't be debt free- I have some fundamentalist friends who believe that you should have no debt.  Well, I don't know about you, but I have no sense of pride knowing that my Range Rover is lien free.  I mean, here's an asset that goes down in value the minute you drive it off the lot and continues to go down.  What's the use of having it paid off?  It still goes down.  The continued drop in value almost equals on an annual basis the interest that you paid to own it.  If your house were debt free right now you'd have lots of equity but a tough time pulling all the equity out due to lower appraisals and tighter lending. 9. Focus on the Future- In the end, we're all dead.  Some of us die easier than others, but we all die.  It makes no difference in an Alzheimers ward whether you have 5 million in the bank or nothing.  Stop asking the question: "What will I do if I run out of money?" and ask the question, "What am I willing to do to have the life I want?".  I could be just as happy doing merger and acquistion work or walking dogs.  Sad, but they are both sources of enjoyment for me. 10. Create a "Buy List" and not a "Bucket List"- What this does is force you to make a case for purchasing the future at a discount.  There are lots of great companies on sale right now. Just experiment with trying to understand them and what there future is.  Creating a "Buy List" will have huge latent energy inside it. Finally, STOP BEING AFRAID AND STOP MAKING STUFF UP TO SCARE YOURSELF WITH.  There is enough to make you scared in the world without you dreaming up things.  Fear is paralyzing, defeating, demoralizing, and every other "ing" you can think of that's bad.  Fear loves the stagnant places.  It finds you when you are still so keep moving. The only thing you have ever sold that was worth anything as an advisor is confidence.  The only thing clients have ever really bought is confidence.  Go sell confidence today and get as many clients to buy as you can.  Go create a "Better Times Portfolio" of stocks that you think will do well long term. ( 20 minutes or more) and create a discussion around this with your better clients.      10/30/2008http://www.advisorfreedom.com/comments.asp?id=219There are two ways to put advisors out of business:  One is to regulate them out, making the complexities and costs of doing business impossible burdens to overcome.  Two, is to take over their businesses directly.  The Goverment is actually cooperating with the SEC and FINRA to do both.  So, my advice:  Run, don't walk, from the 401-k business. My bet is that no matter who wins, we have a mandatory Government sponsored retirement program that looks and feels like your own program but is really Social Security II in drag.  This program will give you lifetime income with no accountability as to how or where the money is invested.  It will be a guaranteed paycheck each month, tied to an index, your mortality, and based on the governments promise to pay.  Wow, doesn't all that make you feel more secure? Here's what advisors need to do:  They need to work with the companies that aren't brain dead and start marketing tax deferred vehicles geared as supplemental retirment programs.  Whether it's cash value life insurance, tax deferred annuities, Lithuanian Bank Accounts, or California Revenue Anticipation Bonds, advisors need to put plan A, B, C, and Z into place. It's not clear that the new goverment retirement benefits would be creditor or judgement proof.  I'm almost sure the IRS would have a 'reach through' ability if needed to collect back income taxes.  It's also not clear of the accessibility of those funds or the timeliness of their receipt.  Under what conditions could you withdraw. These new retirement plans actually help to perpetuate an already existing scam, Social Security.  These plan amounts will be held in "Trust" which means they can only be appropriated by people at a very high level with top secret clearances and decoder rings.  They are the equivalent of tax increases masquerading as retirement security.  Call me simple here, but given our demographics, how does this work? As you start reading about these more and more as an advisor start ranting about them to your legislators, governors, milkmen, and craft store owners....anyone who will listen.  This legislation takes away an important part of your business.  Granted, there are opportunities here but it's like telling a star athlete who is completely paralyzed that they can learn to play video football with eyeblinks. Get mad here.  You should.10/28/2008http://www.advisorfreedom.com/comments.asp?id=218If I were an advisor affiliated with a BD who had cleared certain insurance companies as appropriate to do business with, I would be asking for written details of the process by which the BD consistently and continuously monitors the health of the insurer.  My belief is that the insurers are the next big bailout due to their errors on estimating claims experience for LTC policies, premium financing scams, and exploding policies due to premium increases.  Here's why. When those policies self destruct, both the BD and you will be named in the "Breech of Fiduciary" lawsuit.  The difference is that the BD will be represented by $700 an hour lawyers and you will be represented by an attorney of the E&O carriers's choice.  They may be good, they may not be.  One thing for sure is that you aren't their client, the E&O carrier is. The newest strategy for sidestepping contractual responsibility is what I call the "Conseco Switch Trust".  Conseco, which doesn't have the most favorable news coverage concerning its claims payment policies, is placing its LTC policies inside a trust.  I think they're doing this to separate those products from the company's assets in the event of a lawsuit.   I also think you are going to see other companies doing the same thing to minimize their damage. As an advisor, your fiduciary duty is to your client and not the BD.  Make the BD accountable for that which you are going to be held responsible.  If they will not give you this information about their processes, hire a lawyer, have them write the letter, and cover your behind on every single aspect of this.  Otherwise the headline reads:  "Advisor sued in Long Term Insurance Payment Scam".  The BD will issue a statement saying that it's not their policy to comment about on going litigation.  You will issue a statement that sounds like you are the dumbest person on the planet for not knowing this. See, here's what happens.  You and the BD end up getting sued by someone who's unhappy with their insurance product performance.  Your lawsuit stays on your U-4 until Jesus comes again and the BD skates with the lawsuit buried in a footnote next to an asterisk that says, "things you won 't understand."  You get labeled a slimy insurance guy preying on old people and young people and small dogs and cats.  You BD settles "without admitting or denying guilt". (the legal equivalent of the 'undead'.) Ask what Mary and the Morons, AKA, FINRA, is doing in this area.  Since they want to control the insurance industry inside the securities industry anyway, have your attorney send them the same letter.  That way you can start building a case for the "non denial, denial" that they will begin to posture.  Since they missed the entire subprime scam, maybe they can skate ahead of the puck on this one. The insurance products are your own professional IED.  Make sure you don't get taken out by them.10/27/2008http://www.advisorfreedom.com/comments.asp?id=217  I made the decision nearly a decade ago to give up my securities and insurance licenses and spend more time working on my own wealth than meeting font size requirements in order to sell commodity products.  It was a scary time and not one filled with complete confidence.  I thought the industry was in trouble from a regulation and complexity standpoint ten years ago and I think its even more in trouble now.  My advice, now that mother Merrill has been absorbed:  leave the big firms and create your own identity.  It's worth more to your clients and worth way more to you than saying:  "I'm with_______" Here's why: 1. The Big Firms-Merrill Lynch, Goldman, Morgan Stanley, Smith Barney, etc. were all created when being a part of something big was better than being alone in something small.  Madison Avenue, the regulators, and the Government wanted everyone in neat, identifiable locations where they could watch them.  Just like big was better in the 50's and everyone wore a gray flannel suit, the big firms promised for the American Investor what the big corporations promised for the American worker-freedom from risk, increasing returns, and supervision of one's affairs.  2. Technology is on your side- At Advisor Freedom, we've created four web based channels to market our services with less cost than a prom evening ten years ago.  If I had still been regulated by the old NASD, now FINRA, I would still be debating whether I could have color and sound affects. The world is embracing streaming video, podcasts, pay per view, viewer designed content, and access 24/7/365.  FINRA is still struggling with the equivalent of color by number.  Ditch the FINRA licenses, set up an RIA, and be prepared to ditch that when FINRA steps in to ruin that part of the business. 3. YOU are important, Not your FIRM- The relationship has been with the advisor, will always be with the advisor, and is the advisors only equity asset.  Why do you think Ken Lewis is spreading the acquisition bonuses out over 7 years for the Merrill folks?  He knows, like they do, that clients are loyal to advisors and not firms. 4. The WORLD requires flexibility, innovation, and adapability- none of which the big firms are capable of.  Point:  Most firms are still marketing RETIREMENT PLANNING.  RETIREMENT PLANNING is the financial services industry equivalent of a time share unit. 5. The BIG FIRM will abandon you- The big firms will look after their stock price, the executive deferred comp plans, and their own hides before they stick up for you.  Point:  Instead of arguing with FINRA about the unfairness of reps being named in the ARS debacle so that it shows up on the registry, firms are busy trying to figure out little they can get by with disclosing. 5. THE INSURANCE COMPANIES- are the next to go.  Premium financing, guaranteed lifetime payouts, surrender charges, are all going to catch up with them over time.  Blow these guys off big time. You have to start thinking of the big firms as manufacturers instead of monasteries.  They are way past their halo days in terms of influence and presence.  Think of home office the way you would a leper colony:  Look at it, send it money, but never go there and don't drink after the people. Definitely don't sleep with anyone at any level.10/25/2008http://www.advisorfreedom.com/comments.asp?id=216  Being in total compliance with FINRA going forward as an adviser is like having the cleanest wagon in an Amish Village....so what?  It's still a wagon...in an Amish Village....in the 21st Century.  You might go to Heaven for all the adherence but life here is still your own little version of Hell.  FINRA and its little SOVIET UNION approach to regulating an industry is doomed to failure for the following reasons: 1. Commissions are on life support- The recent market bi-polar behavior was difficult for fee based advisors and Hell for commission based ones.  If you sold someone out on a deferred sales charge they not only lost money but lost capital. 2. Big Companies are not the answer- In the last 8 weeks, four of the Golden Names on Wall Street have merged or disappeared.   These guys should've been gone years ago except that they kept the car dealers, restauraunts, tour boats, and hookers alive in New York.  Your brand is as good or better than theirs. 3. Wall Street Affiliations are the same as HIV- There's a whole generation who has filed the last two months away in their memory for when they have money.  No more absolute belief.  No more buying without full transparency.  No more legacy credibility. 4. FINRA is Moronic- Mary and her group of Morons are so unbelievably out of touch with modern day advisory practices.  They are the equivalent of Inspector General Forces in the military focusing on whether the SEALS have shines their boots.  Put them in charge of Europe and it's reconstruction. 5. Technology and Message are the new Products- Meaning is the new money and words are all you have to take someone's heart away.  Filtering it through FINRA's Intellectual Castration Solution gurantees that no one reads what you think, listens to what you think, or does what you think.  It does however guarantee that you have the most boring marketing materials since Matthew, Mark, Luke and John tried to publish a series. 6. Central Planning died with the Soviet Union- Mary and Putin should work together.  What one lacks in awareness the other makes up in clandestine activity. Fewer clients, more money, less regulation.  It's a better future.    10/17/2008http://www.advisorfreedom.com/comments.asp?id=215As a senior (age 56) I can tell you that I don't want my financial advisor telling me to cut back.  I've cut back all of my life to send a child to private school and an outrageously expensive College, help my wife's parents, support mine, give to churches and charities, and help feed hungry giraffes somewhere.  I may go into my later years without money but I will be wearing Armani and have lots of valet tickets from Mortons. Behind this is advice is often well intentioned reasoning that says you should keep some powder dry. Here's the problem with that:  No one else is doing that.  Not the government.  Not my neighbor.  Not my children.  Certainly not the government.  Why should I cut back when no one else is?  I can make 50K a year picking up dog doody and bathing cats in Charlotte, NC.  I do that now for my own crew so what's the difference other than getting paid for it. Let's just calm down and stop scaring people.  Earlier this year it was Global Warming.  Now that's called Climate Change.  Now it's a world wide depression.  Soon it will be a mild to moderate consumer slowdown.  Next it will be Radon in our toilet seats.  Someone was telling me the other day that bidet's may cause cancer.  I've known that the focus of bidet's can make you crazy but I didn't know that there was a cancer danger. Here's the thing:  In the long run we are all dead whether we have money or not.  The later years of our lives are filled with incontinence, incompetence, ungratefulness, and unawareness if we have a big savings account or not.  Just spend.  Not everything.  Just enough to make your children mad and you happy. Tell your clients to calm down a little and slow down a little but not stop to wait for things to get better before they go out to dinner again.  Just like you couldn't tell them with certainy that they would've lost 20% in a week...you can't tell them with certainty they can get it back. Stop listening to Suzie Orman...her teeth are too bright.  10/12/2008http://www.advisorfreedom.com/comments.asp?id=214