Raymond James Financial executives are encouraging advisors affiliated with the firm to get politically active and place clients' needs first in light of unprecedented litigation and regulation for the securities industry.

That was the message from Chet Helck, president and chief operating officer, and Tom James, chairman and CEO, at the firm's recent 2004 National Conference for Professional Development in Orlando, Fla., earlier this month.

"We're defending your honor, make no mistake about it," Helck told conference attendees.
Both men agreed changes in the industry are needed, such as full transparency and better enforcement of existing regulations. However, some proposals go too far, James said. "We are punishing the innocent for the sins of a few," he commented.

For example, eliminating 12b-1 fees would be a mistake, James says, because firms need a revenue source to provide services other than just transactions. And although he's in favor of full disclosure of fund fees, he doesn't think legislation is needed to limit them.

James believes annuities will be the next area regulators will scrutinize. "It's time for us to review (annuity) practices and make sure commissions are appropriate," he said.

James also offered this advice:
Don't sell the hotdot. It may look good for awhile, but not the long term.
Continue to move to asset-based compensation. It puts advisors' rewards in line with those of clients.
Use high standards when recruiting.
Product screening needs to be tougher than ever.
Fee agreements should be revised so they specifically describe what's being provided to clients.