Thompson, who in 1995 joined the Institute of Certified Financial Planners (which merged with the International Association for Financial Planning in 2000 to form the FPA), said he is leaving for personal reasons. He will be succeeded by Dan Barry, the current director of government relations in the FPA's Washington office.
"It's something I've been thinking about doing for a while," says Thompson, who before joining the FPA worked at a family business in Colorado and was a lobbyist with the International Franchise Association in Washington. He says he'll probably remain in the nation's capital and be involved in some type of government relations work.
Thompson has played a pivotal role in lobbying Capitol Hill for regulation favorable to the financial advisory industry. He spearheaded FPA efforts in the legal battle with the Securities and Exchange Commission over the so-called "Merrill Lynch rule," which enabled brokers to give fee-based advice and call themselves investment advisors yet remain exempt from regulation under the Investment Advisers Act of 1940. The Merrill rule was adopted in 2005, but was struck down by a District of Columbia appeals court two years later.
Lately, Thompson and the FPA have joined forces with other industry groups to lobby Congress as it debates the regulatory overhaul of the financial services industry. Current pressing issues involving advisors include whether the fiduciary standard should be imposed across the industry and which regulatory body should oversee the advisory business.
"I feel like we're covered because we have good people in the D.C. office," says Marv Tuttle, the FPA's executive director. "But I can't say it's not a big loss because he has so much understanding and expertise in industry issues."
New Web Sites Aim To Keep You Honest
The Web has been a great marketing tool for financial advisors, but now some third-party Web sites enable clients to peek deeper into your operations than you might want.
The following two sites represent different plays on the keeping-your-advisor-honest theme. AdvisorBackgroundCheck.com allows clients and prospective clients to look closely at your regulatory and compliance record. EvaluateMyAdvisor.com gives the client a second opinion on whether the investment performance you report to that client is accurate and what, if any, value you add by way of your management.
AdvisorBackgroundCheck.com
AdvisorBackgroundCheck.com essentially asks, "How do you know your advisor isn't the next Bernie Madoff?" It streams a series of news reports about advisor fraud, Ponzi schemes and identity theft. The implication is that your motives are questionable until proved otherwise, according to AdvisorBackgroundCheck's criteria.
The main purpose of the site, though, is to provide viewers with information it gets from background checks it runs on advisors. "We run multiple checks including a civil/criminal check, a financial liens/judgments check, a bankruptcy check, a professional license check, a State Department of Insurance check, a FINRA check, an SEC Check, a State Securities Department check and a Better Business Bureau check," says company spokesman Bryan Binkholder. "Of the personal financial information checked, the only portion that would be divulged to a consumer would be if the advisor had had a bankruptcy." Advisors are given the opportunity to respond to and clarify any items on their checks.
Advisors who pay $189 to become site members and who have clean regulatory records are displayed prominently as already having AdvisorBackgroundCheck's seal of approval. The site posts information it has found and comments or explanations the advisor has added. A consumer interested in an advisor who isn't a member can request a free background check. The site then contacts the advisor, gives the advisor the client or prospect's name, and explains that the consumer wants a background check done. The advisor must pay $50 to have the check done or instead pay the $189 member fee and avoid any present or future $50 charges.