Galvin’s ‘censorship’ chilling for advisers

In a new piece of legislation, Massachusetts Secretary of the Commonwealth William Galvin has single-handedly made sure that the demise of the advice business for aging boomers and their parents is closer than ever.

In a new piece of legislation, Massachusetts Secretary of the Commonwealth William Galvin has single-handedly made sure that the demise of the advice business for aging boomers and their parents is closer than ever.
In an act of censorship that rivals Nazi Germany’s in its boldness, Massachusetts has adopted legislation, effective next Saturday, that makes the words “senior,” “retirement,” “elder,” “certified,” “adviser” and “specialist,” and the people who use them, laser-painted targets for the state securities commissioners, attorneys general and every other state agency associated with consumer fraud.
Congratulations, Mr. Galvin. You have just helped every mature adviser in the industry with the decision of whether to sell their practice.
Under the new law, Massachusetts will allow only credentials accredited by a nationally recognized accreditation agency.
I wonder whether it would be the [New York-based] American Institute of Certified Public Accountants, whose flagship firm, Arthur Andersen [LLP of Chicago], brought you Enron [Corp. of Houston] and the largest bankruptcy in American business history. Perhaps it would be the American Bar Association [of Chicago], whose retro legislative attempts brought you the billion-dollar tobacco industry settle-
ment and the multimillion-dollar personal-injury attorneys.
I am all for scrutiny by some sort of national agency, but I am not sure who has the credentials to do it. Maybe we just create a new agency: The National Standards and Practices Guideline Board.
Mr. Galvin wants to create the largest group of underserved people in the country over the next 10 years. The chilling effect for legitimate advisers is frightening.
I can’t imagine anyone who would risk their future revenue by specializing in advising “seniors” of anything.
The only people who are more ecstatic over this decision than the secretary are the folks at NASD [of Washington], as it gives them full censorship powers. This moronic piece of legislation will be cloned by other state regulators in an attempt to add the “senior-protector merit badge” to their collection.
Mr. Galvin has also defined “senior” as anyone over the age of 65.
Congratulations! You have just insulted me and every other boomer approaching that age.
We think that age 65 is the beginning of second-stage adolescence.
This decision doesn’t work, and it will fail at the Supreme Court level.
First, it singles out a group of people unduly and makes no differentiation as to their capabilities and intent. The last time I read the Constitution, it said something about “equal protection.”
Second, it violates the First Amendment provisions of free speech and the right to publish. Third, it violates almost every aspect of the right to conduct a business under the commerce clause.
And finally, it is just stupid. I am all for protecting seniors; I just don’t want to live in Russia to do it.
Dan Taylor
Founder
The Parent Care Solution
Charlotte, N.C.
Editor’s note: The writer plans to create a parent care specialist designation and train advisers in the discipline.

SIFMA is choosy on investor choice
I had to laugh when I read the Securities Industry and Financial Markets Association’s press release regarding the Securities and Exchange Commission’s decision to accept elimination of the [broker-dealer exemption rule].
SIFMA president and chief executive Marc Lackritz said (presumably with a straight face) that because of the SEC’s decision, “1 million investors will be disadvantaged — forced into accounts where choices are limited.”
In line with the pro-investor altruism for which his industry is so well known, he further declared, “[New York- and Washington-based] SIFMA pledges vigorously to pursue a solution that will enable investors to have access to fee-based payment options and that will not force investors into a world of one-size-fits-all accounts.”
Whenever SIFMA feigns concern for investors, it is playing solely to its audience in Washington. If Mr. Lackritz is right, and investors see their choices limited as a result of this decision by the court and the SEC, it will be for one reason only: Broker-dealers will never give up the hugely profitable game of attracting new customers by marketing themselves as advisers, while simultaneously arguing in arbitration disputes with aggrieved ex-customers that they were merely order takers.
All SIFMA’s members need to do if they want to continue to offer fee-based accounts is to embrace the fiduciary duties they have owed their customers all along.
And on the subject of arbitration, I would like to suggest that Mr. Lackritz wields a two-edged sword when he defends investor choice and disparages a world in which one size fits all. Just for a laugh, let’s take his quote and substitute a few words, like so: “SIFMA pledges vigorously to pursue a solution that will enable investors to have access to [dispute resolution] options and that will not force investors into a world of one-size-fits-all [NASD arbitration.]”
We aren’t likely to ever hear SIFMA support that kind of investor choice, are we?
Jay H. Salamon
Partner
Hermann Cahn & Schneider LLP
Cleveland