Over the next three years, our industry will face major questions that could significantly reshape its regulatory framework, including how to effectively harmonize oversight between RIAs and broker-dealers, and how to continually adapt to ongoing technological and demographic change.
At the same time, we will also have a chance to move our regulatory structure in a direction that works better for everyone, from firms and advisors to end clients. Industry leaders like the Financial Services Institute (FSI) are providing vital input to the SEC on its proposed best interest standard of care, while Finra CEO Robert Cook’s Finra360 initiative is improving our key regulator’s transparency, efficiency and communication with members.
Whether we make the most of these opportunities depends on our ability to continue to strengthen our working relationship with regulators, especially Finra. And one of the most effective ways to achieve that goal is to choose industry representatives for the Finra Board of Governors who understand how to serve as effective agents of change on behalf of our industry.
I’d like to share with you what I’ve learned in my three years as the Mid-Size Firm representative on the Finra Board about creating positive change. These insights helped me implement critical reforms such as streamlining the Finra exam process; improving transparency by communicating Finra’s priorities and disclosing its budget; and establishing the new Small Firm Helpline, among many others. I believe these principles will be vital to our continued success in working with Finra over the next three years, as well.
Effecting Positive Change By Building Consensus
With the support of my fellow firm leaders across the country, I was elected to the Mid-Size Firm seat on the Finra Board in 2015 with a clear mandate for reform. The voters sent a powerful message in that election that they wanted greater transparency, efficiency and communication from their regulator. From day one of my time on the Board, I have maintained an unrelenting focus on that mission.
If there is one lesson I’ve learned over 20 years of working with advisors to solve problems for their clients, though, it’s that tackling complex challenges means taking the time to understand the views and needs of everyone involved.
With that in mind, my first step when I arrived on the Board was to listen. I got to know my fellow Board members and their needs and priorities, and I proactively searched for opportunities to support initiatives that would serve my constituents’ goals while advancing Finra’s mission to protect investors and maintain the integrity of the markets.
This approach helped me build both credibility and an in-depth understanding of the various issues that were under consideration by the Board. When I saw an opportunity to get involved in streamlining the Finra exam process, I was able to decisively help move that proposal toward approval and implementation. I was also able to influence the proposal’s key priorities, including reducing member firms’ time spent on exams and sharing Finra’s general exam findings.
Never Lose Touch With Your Constituents—Or Their Needs