Long-Time Independent Advisor Goes The Other Way, Joins Ameriprise

Friday, April 13, 2012 07:21
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Long-Time Independent Advisor Goes The Other Way, Joins Ameriprise

Tags: breakaway brokers | regulation

After being on his own since the early 1980s, a Texas advisor has gone back to the employee model. The motives are simple: compliance and technology.

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Charles Hart of Plano is now one of over 60 Ameriprise advisors who operate in five branch offices in the city.

 

He just got onto the broker-dealer's website, but with $114 million in client assets already under his belt after 30 years, he's got a little breathing room before he has to prospect aggressively.

 

However, Hart didn't come to Ameriprise for the marketing power of the brand.

 

He says the regulatory burden of operating as an independent had gotten so serious that he would have needed to hire his own compliance officer to keep up.

 

Based on his BrokerCheck profile, it looks like he's going to be giving up his DBA of Vision Wealth Management -- affiliation ended in March -- and his separate office in order to move in with 23 existing Ameriprise affiliates.

 

Only he can say how much a compliance officer would have cost him. But those of you who've moved your offices recently know that in itself proves that this is a non-trivial decision.

 

Hart also says Ameriprise offered him data security and account aggregation, both of which are available to independents from third-party vendors.

 

He suspects he's not as much of an outlier in the industry as A4A readers may think. Keeping up with compliance really was killing him, and there are probably a lot of independents in a similar boat.

 

If so, we could see that the price of freedom boils down to wanting someone to tell you the rules, which is at best grim humor.

 

And if he's right about this kind of move becoming more common in the future, it says a lot about the state of the post-Dodd-Frank industry.

 

It's not so much that following the rules was devouring Hart's profit margins. It was the uncertainty and the rate at which regulations keep changing.

 

Having to track the twists and turns was keeping him from his clients. Now he just does his job and lets the Ameriprise compliance gurus monitor the rules.

 

It sounds like he's a pretty motivated and disciplined guy. Maybe all he needed was middle-term clarity on the compliance environment -- a fixed star to steer by -- and he could've done the rest himself.

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