FINRA Conference 2017

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2 FINRA Conference 2017 Takeaways: (from Robert Cook, CEO FINRA) Regulatory landscape is much more complex than ever before with more overlap Best Interest is here to stay Cost of ownership is lower and value is better for the consumer today Consumer choice, stronger than ever Demand for advice will grow Transparency is the answer to investor confidence Still a great industry, but concern with aging group of investment professionals More bullish on the industry than the markets

3 DOL Fiduciary? Yes, as of 11:59PM tonight! But I have always acted in a fiduciary capacity with my clients! Now you have to be able to prove it! Impartial Conduct Standards now in place Give advice that is in the best interest of the retirement investor Must adhere to basic fiduciary norms and standards of fair dealing Recommendations must be prudent, loyal and free from material misrepresentations The Firm and Adviser must receive no more than reasonable compensation for their services Documentation Never more critical than now! Document the Prudent process used to make retirement recommendations(crm)

4 Required Fiduciary Training On 5/24, LPL sent 2 s with links to trainings on the Learning Center: Fiduciary Essentials: Overview of DOL Fiduciary Rule Fiduciary Essentials: Insights of DOL Fiduciary Rule Each course takes about minutes to complete Goal ensure understanding of requirements & implications of the DOL fiduciary rule, what s required to act as a fiduciary, and your role in serving investors best interests on brokerage retirement accounts Training must be completed by October 31, 2017, however, we encourage you to complete these ASAP due to June 9 th DOL Rule Applicability

5 Account Opening Prudent Process Rationale DOL fiduciary rule introduces the requirement that an advisor must follow a prudent process when making recommendations to clients Must document why a new account is in the client s best interest ClientWorks has these enhancements built in to the account opening process. You just select from a menu of available responses regarding why the new account is in the client s best interest If you re still using BranchNet to open new accounts: effective June 9 th you must use either the F731 (not a client signed form) or record your own rationale to document why new account is in the client s best interest. Must be maintained in your client file.

6 Rollovers We CANNOT recommend that a client rollover his/her qualified plan into an IRA. We can only provide education You can discuss the pros and cons of staying with the Company Plan versus an IRA Rollover, a Plan to Plan Rollover, or a Taxable Distribution You can provide LPL s IRA Rollover Guide If the client decides to do a rollover, you need to document why this decision is in the client s best interest

7 LPL Annuity Sales process Sales rationale must be strong and thorough Annuity concentration is an issue Source of funds must be clear and detailed Alternative Investments New AI1 form just released Rationales will need to be more explicit BCP(Business Continuity Plan) Make sure you are using the most current version Will your plan pass a test?

8 OBA s & PST s LPL cont d Are your OBA s up to date? Be careful not to get involved in any personal securities transactions without approval Reverse Churning Be careful to avoid this all clients may not be a fit for an Advisory Account NEVER use personal e mail for business communication

9 Proactive Surveillance (ProSurv) Updates Reminder: as of 1/1/17 required to enter annual advisory client meeting notes into ProSurv On June 17 th LPL will launch new user interface exclusively through ClientWorks All alerts will be in one concise grid. The filters and multiple clicks are going away!

10 Client Management Widget

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12 New ProSurv Landing Page with Grid

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14 2017 LPL Firm Element Will be released around July 31 st and must be completed by October 31 st on the Learning Center or at Focus For the first time, you will have the opportunity to complete all 5 courses at Focus 5 Courses for 2017: 1. Annual Compliance Meeting 2. Security and Privacy 3. Financial Crimes and Anti Money Laundering 4. Product Suitability, Switches and Concentrations 5. Variable Annuities

15 NPA RIA Be familiar with NPA portal on Google Need to complete 2017 certifications(look for e mail) Review ADV Part 1 & 2 and make sure that your 2b disclosure document is accurate. Destroy all previous versions and only use versions available on the NPA portal

16 NPA RIA Portal Login ria portal.advisorassist.com

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20 Cybersecurity Avoid ransomware and other hacks by making sure your devices are current with latest updates! NEVER use public Wi Fi for business or financial dealings Do not use text or IM for any business communications Careless actions of associates are responsible for 59% of cyber attacks on businesses, according to a 2016 Kapersky Labs study

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