Financial advisors Stephen A. Kohn and Joseph Romano are squaring off in the race to represent small firms on the Finra Board of Governors.
Only one seat for a small-firm representative is open in the election for a three-year term, which will be held at the Finra annual conference July 30. A total of 10 seats on the 24-member of governors are reserved for industry representatives from small, medium and large firms. The rest are public members. Small firms are defined as those with up to 150 registered representatives, of which there are about 3,800, or 90 percent of Finra firms.
Kohn founded Stephen A. Kohn & Associates Ltd. in Lakewood, Colo., in 1996 after working at other firms. The firm has 28 registered representatives, of which four perform investment advisory services, with $250 million in assets under management. Kohn said he wants to establish a code of conduct for Finra examiners who review the practices of member firms.
“I am subject to the same exam process as a Merrill Lynch or other large firm,” Kohn said. “The exam process is getting more invasive every year and the over-regulation is forcing small firms out of the business.”
The exam process lasts too long and is a drain on resources for a small firm, he said. His last Finra exam lasted from December through the following September, and that was without any complaints filed against him.
“The examiners should have a code of conduct. Now they operate autonomously and we have no right to challenge them,” Kohn said. “I think Finra does a great job of a lot of things, but there needs to be improvement. The examiners have never run a small business.”
Kohn added, "I will make every attempt to be the voice of change. I will make every attempt to bring fairness to the system [and] justice to all members. I will strive for fair treatment for us all.".
Romano is president of Romano Wealth Management in Evanston, Ill., which was founded by Joe Romano’s father and now has nine registered portfolio managers and $1 billion in assets under management.
Romano said his bid for the board of governors position is a culmination of seven years of volunteering on industry and Finra committees.
Romano said he wants to be a smart and logical voice to advocate for small firms on the board.