YouSaid · the spoken record

Brian Hamburger

lines on the record: 171
first: 2023-04-21
most recent: 2023-04-21
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“There's no question that the SEC's regulatory exams have gotten better. And they've gotten better primarily because the SEC has more data and they're using that data. So before the SEC even walks into an advisor's office, they often have a short list of deficiencies. And I could find those fishes. That they're looking for what they already know about.”
2023-04-21 · Masters in Business · Brian Hamburger on Surging Merger Business in RIAs · IDENTIFIED FROM THE TRANSCRIPT · source
“I know. I think your perception is shaped by when you entered into this industry, right? People used to market all the time death, taxes, regulatory exams. The thing I can share is that there's a zero mortality rate attached to regulatory. But there are fine.”
2023-04-21 · Masters in Business · Brian Hamburger on Surging Merger Business in RIAs · IDENTIFIED FROM THE TRANSCRIPT · source
“But within that experience, don't you think that it's as much a quality of service issue as anything else, right? We talked earlier about the distinction between compliance, legal, and risk, but much of regulatory compliance is something that we can handle. We know it's a finite set of rules. But what you're getting into is monitoring oversight, right, making sure that people are doing the right thing. And quite often when you find a dispute with a client, it comes down to poor communications.”
2023-04-21 · Masters in Business · Brian Hamburger on Surging Merger Business in RIAs · IDENTIFIED FROM THE TRANSCRIPT · source
“Regulatory compliance is that non negotiable line, right? And so it makes sense that if someone's going to serve dual role that the chief operating officer steps in.”
2023-04-21 · Masters in Business · Brian Hamburger on Surging Merger Business in RIAs · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, a lot of people have noted recently what I think has been a long time trend, which is that the chief operating officer often. Also serves as chief compliance officer. I don't think that's the wrong call when someone needs to wear multiple hats. Because to me, regulatory compliance is simply an operational baseline standard, right? That's your non-negotiable line. It's like, we never dip below that standard. Maybe we're striving for excellence. You know, we're trying to get nine out of 10 on these.”
2023-04-21 · Masters in Business · Brian Hamburger on Surging Merger Business in RIAs · IDENTIFIED FROM THE TRANSCRIPT · source
“A third party, a vendor to actually serve as a CCO. We think we can, as an outside provider, we can layer on the top and underneath the CCO and we can provide them with all of the support and guidance that they need, but it's really critical to me that someone within that management with a management role takes on the role of that.”
2023-04-21 · Masters in Business · Brian Hamburger on Surging Merger Business in RIAs · IDENTIFIED FROM THE TRANSCRIPT · source
“And I've never seen in all my years of practicing law, I've never seen a vendor relationship where you give the vendor the authority to hire or fire an employee. It just doesn't happen. So our reading of it doesn't allow”
2023-04-21 · Masters in Business · Brian Hamburger on Surging Merger Business in RIAs · IDENTIFIED FROM THE TRANSCRIPT · source
“Me, the distinction here is that we're helping run an outsourced compliance department. We should be all of the resources that a fully functional outsourced compliance or compliance department should be. On the other end of an email and the other end of a phone call, any type of communication. But to me, it's critical. That chief executive, that chief compliance officer, the C suite individual, sits as an employee of the firm so that they have the proper authority, they're granted the proper authority within the corporate documents, that they have the authority to carry out their responsibilities, including the ability to hire and fire personnel. The SEC says that person needs that authority.”
2023-04-21 · Masters in Business · Brian Hamburger on Surging Merger Business in RIAs · IDENTIFIED FROM THE TRANSCRIPT · source
“Indicates that someone who is an outsourced service provider cannot serve in the role as chief compliance officer. But I know other firms do it, right? They've made a business out of it. Before”
2023-04-21 · Masters in Business · Brian Hamburger on Surging Merger Business in RIAs · IDENTIFIED FROM THE TRANSCRIPT · source
“I don't know I don't know. I mean, the SEC hasn't been clear on it. We don't think it's possible at all. Oh, really? Yeah. I mean, you know, our reading of the rule.”
2023-04-21 · Masters in Business · Brian Hamburger on Surging Merger Business in RIAs · IDENTIFIED FROM THE TRANSCRIPT · source
“And so we built our services to help lead and direct the activities of the CCO, right? To give them kind of an editorial calendar and an agenda, to give them information for which to do their job effectively, and then to layer underneath them and help administer their work and carry out help carry out their responsibilities. But the chief compliance officer always has their finger on the trigger.”
2023-04-21 · Masters in Business · Brian Hamburger on Surging Merger Business in RIAs · IDENTIFIED FROM THE TRANSCRIPT · source
“Really, clarified the role of a chief compliance officer, including what quality as a chief compliance officer need to have, their autonomy, the level of control and authority that they had to have. And it made it clear to us that you cannot outsource the role of a C-suite executive, specifically a chief compliance officer within an RAA. So for all the firms that we work with, their chief compliance officer is an employee of the firm. Because that employee needs to have authority to manage and control other employees and monitor them. Tough to argue that that's possible when you have an outsourced vendor that you could just sever their contract at any time. Right.”
2023-04-21 · Masters in Business · Brian Hamburger on Surging Merger Business in RIAs · IDENTIFIED FROM THE TRANSCRIPT · source
“Back in 2000, we had two services at Market Council. One was the RAA incubator, which we still have to this day. The other was called Your Compliance Officer. And it was kind of a cheeky name. But keep in mind, this was like Windows 2000 era.”
2023-04-21 · Masters in Business · Brian Hamburger on Surging Merger Business in RIAs · IDENTIFIED FROM THE TRANSCRIPT · source
“Right. And so when larger firms would advocate for these rules, no one thought about the law of unintended consequences. The big firms did, right? There's really smart people at Morgan Stanley, Merrill Lynch, and Goldman Sachs, right? I mean, these people are really smart and they have time to think about this stuff. Whereas small firms, as you know, are just reacting to these rules on the most part, right? They don't have as many resources to participate in these meetings and the rulemaking and writing comment letters. And so as a result, large firms have an outsized influence over the rulemaking process. It's just the way it is.”
2023-04-21 · Masters in Business · Brian Hamburger on Surging Merger Business in RIAs · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, but that's why, right? That's why they were able to justify a lot of these restrictive rules over the years, right? Because there were people out there doing bad things.”
2023-04-21 · Masters in Business · Brian Hamburger on Surging Merger Business in RIAs · IDENTIFIED FROM THE TRANSCRIPT · source
“That states like California like the fact that broker dealers have that level of supervision and control, right? When it comes to protecting investors.”
2023-04-21 · Masters in Business · Brian Hamburger on Surging Merger Business in RIAs · IDENTIFIED FROM THE TRANSCRIPT · source
“And so a lot of these restrictions are tied to the fact that these folks are leaving broker dealers. And so, yeah, these are Finn rules. Now, listen.”
2023-04-21 · Masters in Business · Brian Hamburger on Surging Merger Business in RIAs · IDENTIFIED FROM THE TRANSCRIPT · source
“So you're absolutely correct with regards to the arbitration, but keep in mind, you said, well, if I leave Finra, right, if I no longer am a broker and I decide to go fee only, they can go pound sand.”
2023-04-21 · Masters in Business · Brian Hamburger on Surging Merger Business in RIAs · IDENTIFIED FROM THE TRANSCRIPT · source
“They've gotten a little better, haven't they? But it hasn't gotten better on the whole. I mean, there are areas where they have improved the arbitration process has gotten better by judicial.”
2023-04-21 · Masters in Business · Brian Hamburger on Surging Merger Business in RIAs · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, I think that I think there's been an influx in capital into the space. Investors see this as a safe investment. Right, but one with significant upside, right? Like any other self-regulatory. Oh, so when you say the...”
2023-04-21 · Masters in Business · Brian Hamburger on Surging Merger Business in RIAs · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I mean, MA has come upon the wealth management space. There's hysteria, right? When it comes to M&A. There's a real lack of logic that's out there.”
2023-04-21 · Masters in Business · Brian Hamburger on Surging Merger Business in RIAs · IDENTIFIED FROM THE TRANSCRIPT · source
“That's right. And that's the biggest distinction that we have between traditional brokerage industry and the wealth management industry. And that's changing”
2023-04-21 · Masters in Business · Brian Hamburger on Surging Merger Business in RIAs · IDENTIFIED FROM THE TRANSCRIPT · source
“They will have it both ways. The question is the legal standard of care. The question is are the products in there pure. Is there a cash threshold in there where they're scraping money off the top? Because at the end of the day,”
2023-04-21 · Masters in Business · Brian Hamburger on Surging Merger Business in RIAs · IDENTIFIED FROM THE TRANSCRIPT · source
“They're very well intentioned people. I think where you face this dichotomy is with the firms because the firms, even if they push out a fee-based program.”
2023-04-21 · Masters in Business · Brian Hamburger on Surging Merger Business in RIAs · IDENTIFIED FROM THE TRANSCRIPT · source
“But here's the distinction that I think will help you with your segue over to M&A as well, is that I think financial advisors, whether they are brokers or advisors, are largely an amazing crop of people. I think almost all of them are in it for the best of reasons. I think”
2023-04-21 · Masters in Business · Brian Hamburger on Surging Merger Business in RIAs · IDENTIFIED FROM THE TRANSCRIPT · source
“Not a fiduciary standard. You could call what you want. But it just coincidentally has the two core words that define the fiduciary standard, right?”
2023-04-21 · Masters in Business · Brian Hamburger on Surging Merger Business in RIAs · IDENTIFIED FROM THE TRANSCRIPT · source
“You would think, right? But then they get blessed and they get blessed by the SEC on this notion of a best interest standard, right? Which is”
2023-04-21 · Masters in Business · Brian Hamburger on Surging Merger Business in RIAs · IDENTIFIED FROM THE TRANSCRIPT · source
“A couple things on that. First of all, the way these sophisticated organizations do is they win on multiple fronts, right? Because along with what you're saying here, right, as they've evolved their product, they've mitigated risk. They've also engaged in some sleight of hand, right? So where advisors are subject to a fiduciary obligation, which you know, right, that means they have to act in the best interests of their clients.”
2023-04-21 · Masters in Business · Brian Hamburger on Surging Merger Business in RIAs · IDENTIFIED FROM THE TRANSCRIPT · source
“History indicates otherwise because by all measures they're losing the game to independent wealth management. But there's still a lot of really smart talented people there, as we talked about before.”
2023-04-21 · Masters in Business · Brian Hamburger on Surging Merger Business in RIAs · IDENTIFIED FROM THE TRANSCRIPT · source
“So I honestly think that some of the larger firms that are in the protocol are there as a matter of pride. I think that if they were to withdraw, I think that Their advisors would see that as a sign of defeat. Really? I do believe that. I think that's one of the theories. And I've spoken to executives at some of these large firms and they said the optics around withdrawing would be terrible. They also believe that there's a brighter future for them. They believe that they can innovate their way out of this and have brokers stay at these firms for all the right reasons.”
2023-04-21 · Masters in Business · Brian Hamburger on Surging Merger Business in RIAs · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, there's still no rating, right? So the limitation on rating doesn't emanate from the protocol. The protocol just doesn't protect you from rating.”
2023-04-21 · Masters in Business · Brian Hamburger on Surging Merger Business in RIAs · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, They announced, oh, our omission, but they're suddenly, you know, withdrawing from the protocol without the requisite notice. And so, yeah, we've been advocates of not only having the protocol, but making sure that the terms of the protocol are enforced, that there's no gamesmanship within the protocol.”
2023-04-21 · Masters in Business · Brian Hamburger on Surging Merger Business in RIAs · IDENTIFIED FROM THE TRANSCRIPT · source
“Experienced what we alleged was some gamesmanship when Morgan Stanley bowed out of the protocol. We actually forced a change in the administrator because lo and behold, the law firm that was representing Morgan Stanley forgot to send a timely notification of Morgan Stanley's withdrawal.”
2023-04-21 · Masters in Business · Brian Hamburger on Surging Merger Business in RIAs · IDENTIFIED FROM THE TRANSCRIPT · source
“It wouldn't be a question. I'm smirking here. Can't see that on a radio, but because there's a running joke within the space, there's a gathering each year that is assembled by a leading labor employment firm in the space. And they bring together probably about 100 practitioners who focus on employment law within the securities industry. And for many years, I was the only independent representative that worked with RAAs that would come to these meetings. And it's a big Q&A session, right? We work on case studies. And there wasn't a case study that passed where I wasn't the butt of one of the jokes. And like, unless Brian decides to unravel this, you know. And so, you know, for many years, we were the troublemakers with the broker protocol. When the broker protocol...”
2023-04-21 · Masters in Business · Brian Hamburger on Surging Merger Business in RIAs · IDENTIFIED FROM THE TRANSCRIPT · source
“Broker. I mean, we know what a broker is, but they never define the term. I mean, arguably a car wash can join the broker protocol, right? Because it is like a prisoner exchange, right? It is, you know, it's very much a protocol. And so coming off of that, you know, thousands of RAAs have joined the broker protocol. And they are beneficiaries since they're often the RAAs often have a less restrictive environment. They're beneficiaries of this broker protocol. They're able to freely Extrapolate talent from these otherwise restrictive scenarios and bring them to their firm.”
2023-04-21 · Masters in Business · Brian Hamburger on Surging Merger Business in RIAs · IDENTIFIED FROM THE TRANSCRIPT · source
“Absolutely. And so I said, So I guess we're going to have to then deal with that. They thought again about it. And they said, you know, on second thought. We're okay with the RAA joint”
2023-04-21 · Masters in Business · Brian Hamburger on Surging Merger Business in RIAs · IDENTIFIED FROM THE TRANSCRIPT · source
“Then it seems like we have a legal problem because it seems like you guys are creating a moat. And this seems to be an agreement.”
2023-04-21 · Masters in Business · Brian Hamburger on Surging Merger Business in RIAs · IDENTIFIED FROM THE TRANSCRIPT · source
“What the judge has to say. Speaking of antitrust. So these four founders that concocted this three-page agreement, they say this was not meant for RAAs. And I say, well,”
2023-04-21 · Masters in Business · Brian Hamburger on Surging Merger Business in RIAs · IDENTIFIED FROM THE TRANSCRIPT · source
“Somehow Somehow this deal that was concocted on the back of a cocktail napkin seemingly amongst four Global Titans, you know, of there's no price fixing”
2023-04-21 · Masters in Business · Brian Hamburger on Surging Merger Business in RIAs · IDENTIFIED FROM THE TRANSCRIPT · source
“So protocol has been existing since the mid 2000s. And it's a limited forbearance agreement that effectively says if a firm is a member of the protocol, they agree not to enforce certain terms of restrictive covenants that might be contained in an employment agreement. If the broker that's leaving goes to another protocol firm. And agrees to abide by the quote unquote protocol, right? Taking of limited information, furnishing certain notice. And, you know, there's a few other provisions.”
2023-04-21 · Masters in Business · Brian Hamburger on Surging Merger Business in RIAs · IDENTIFIED FROM THE TRANSCRIPT · source
“Like Right. And so from a distance, right, this looks like indentured servitude, right? Or this looks like that we're trading human chattel, right? Both things that are completely illegal and way outdated, not only in this country, but in the world. But in the securities industry, there were still shades of that up until the broker protocol. And maybe still in some pockets. When did the protocol first?”
2023-04-21 · Masters in Business · Brian Hamburger on Surging Merger Business in RIAs · IDENTIFIED FROM THE TRANSCRIPT · source
“It was a bit of the free for all, right? People were leaving to go to firms. In fact, I was in court in the southern district of New York federal court, right? Because all these are handled in federal court. And I watched. A firm go in front of a judge and say this broker should not be able to leave and solicit its clients. And here's our trade secrets and all of these things And the next case that was called, this attorney was on the other side explaining why they had a right to recruit this broker. So the hypocrisy was not lost on federal judges who quite frankly have better things to do.”
2023-04-21 · Masters in Business · Brian Hamburger on Surging Merger Business in RIAs · IDENTIFIED FROM THE TRANSCRIPT · source
“So the broker protocol, we should first probably say that before the broker protocol, the industry was a bit of a wild west. Right. Free for all.”
2023-04-21 · Masters in Business · Brian Hamburger on Surging Merger Business in RIAs · IDENTIFIED FROM THE TRANSCRIPT · source
“And in varying degrees found to be enforceable, right? Depending upon the reasonableness of the restrictions, the states that we're going to be dealing with these restrictions in. And that's how enforceable they are. But we also have to look at the firms that they're leaving. What's the reputation of the firm for actually enforcing the terms of those contracts?”
2023-04-21 · Masters in Business · Brian Hamburger on Surging Merger Business in RIAs · IDENTIFIED FROM THE TRANSCRIPT · source
“It's funny when I describe the employment arrangements or restrictions to people outside of this industry. They think I'm making it up. They think it's a story. And I don't know. I think there's more interesting stories to tell than that. But it is beyond comprehension for those that don't spend time in this space, right? Everything from restrictive covenants such as the inability to solicit former customers to no higher provisions, the inability to hire former colleagues to non-compete, which everyone knows about, to garden leave provisions, which require people to maybe provide some type of extended notice or to sit out for a period of time. These restrictions are real, right?”
2023-04-21 · Masters in Business · Brian Hamburger on Surging Merger Business in RIAs · IDENTIFIED FROM THE TRANSCRIPT · source
“All the way to interesting permutations of the business, whether it's business compliance, it's succession planning or implementation. It's selling off equity, M&A, and everything in between. And then the third area, and probably the area that people know us most for, is employment transition work, where we help folks go from wherever they are to wherever they want to be and everywhere and help them navigate everything in between.”
2023-04-21 · Masters in Business · Brian Hamburger on Surging Merger Business in RIAs · IDENTIFIED FROM THE TRANSCRIPT · source
“So we talked earlier about the work we do within Market Council Consulting, our consulting firm, but most of the time I'm spending personally is within our law firm. We have three distinct practice areas. One is regulatory, where not only do we work a lot with advisors on various legal matters, but also regulatory interactions, right? Working with state and federal regulators on anything that rises beyond a simple examination. The second is business transactions. And our business transactions practice spans from startup.”
2023-04-21 · Masters in Business · Brian Hamburger on Surging Merger Business in RIAs · IDENTIFIED FROM THE TRANSCRIPT · source
“You buy a single license and you log in and you start to configure it. And so the scalability of technology, the scalability of telecommunications is the game changer. And I don't think too many people plot out the acceleration of the independent fragmented wealth management business with the prominence of scalable technology solutions in the place, in the space. But I would say that they've developed and locked step with one another.”
2023-04-21 · Masters in Business · Brian Hamburger on Surging Merger Business in RIAs · IDENTIFIED FROM THE TRANSCRIPT · source
“RIAs, but to stand up a CRM 20 years ago to stand up a CRM like a Salesforce, you would have to buy a dedicated server hosted in a cooled office, have replicate the data.”
2023-04-21 · Masters in Business · Brian Hamburger on Surging Merger Business in RIAs · IDENTIFIED FROM THE TRANSCRIPT · source
“But I think even more compelling is the scalability of that technology. The fact that everything's a cloud-based application and you can scale it down to a single user license, think of the CRMs, right? I mean, everyone knows the CRM.”
2023-04-21 · Masters in Business · Brian Hamburger on Surging Merger Business in RIAs · IDENTIFIED FROM THE TRANSCRIPT · source