Compliance Monkey

Oct 1, 2008 12:00 PM, By Christina Mucciolo

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While compliance duties might be taking up more of their time, sales assistants have proven they can handle it. Since Registered Rep. started doing its sales assistant survey in 2000, sales assistants' have evolved into mini advisors. (See p.54, “Just Don't Call Them Sales Assistants”) “No matter what kind of expertise they have, they're more professional and they're more into their careers. This isn't just a job for them anymore, this is their profession,” says Youngwirth. “I remember a time when not that many of them had their licenses; now it is almost a prerequisite. Most of them have a 7 and many of them have beyond that.”

In fact, Registered Rep.'s annual survey found that the majority of sales assistants (82 percent) have a Series 7; another 61 percent hold their Series 63, 16 percent have a Series 55 and 26 percent hold a Series 66. Take Mega Snyder, who started in the financial advisory business in 1997 and got her Series 7 in 2001 when her advisor expanded her role at the firm. “Mega's role has evolved into [that of] an operations manager and under that are a host of compliance duties, for three remote offices and 11 advisors here,” says Steve Stocker, founder of Investment Partners, a wealth management firm headquartered in New Philadelphia, Ohio.

In addition, sales assistants are on the front lines of client communication. The majority of sales assistant survey respondents (61 percent) say clients rely on them for a variety of needs, including some types of advice. In fact, a sales assistant's ability to develop a close relationship with clients helps them fulfill their compliance duties. Steele says she helps clients the way she might help a friend, an approach that has actually lightened the burden of her compliance duties.

“If clients sense this disposition, they are more willing to take their time to review and sign the new compliance forms that I am constantly sending to them in the mail,” Steele says. “Now that the clients see that I am working in their best interest, the average time that it takes for a client to return a form has decreased from three months to less than two weeks. This reduces the amount of follow up that I have to do.”

Of course, the kind of personal attention clients get from sales assistants like Steele doesn't come cheap. Steele estimates her compensation has increased by about 5 percent a year, with a bonus at the end of the year. She also received a bonus after getting her paraplanner designation and her Series 63 license. This serves as a reminder to firms and reps to keep salaries competitive if they want to retain their top talent, like the Outstanding Sales Assistants we profiled this year, starting on page 59.

Bring The Auditors, Guns And Money!

Escalating compliance costs in the brokerage industry are in the billions, choking firms' revenues.

It is estimated that the securities industry spent $23.2 billion on compliance-related activities in 2004 and was projected to spend $25.5 billion in 2005, according to the most recent survey of Securities Industry Association (SIA) — now the Securities Industry and Financial Markets Association (SIFMA) — member firms. It's no wonder member firms say that over the past five years (since February 2006 when the survey was released) the “regulatory and legislative mandates have had a material, adverse impact on overall compliance spending levels.” Guess what that compliance spending is paying for? The majority (93.9 percent) is “staff-related,” which includes base salary, variable compensation, employee benefits and overhead, “with the greatest impact in recent years on management positions.”

Percent Of Net Revenue Spent On Compliance

(2004 figures, latest available)

Just Don't Call Them Sales Assistants

Is the title “sales assistant” going the way of the word “stockbroker?”

Take it from me: Don't call a sales assistant, well, a sales assistant. I learned this after talking to literally scores of sales assistants (oops, sorry) across the wirehouse, independent and RIA channels around the country. Virtually none of the individuals I spoke to referred to themselves as “sales assistants.”

For example, Edward Jones calls its sales assistants “branch office administrators;” Morgan Stanley dubs its sales assistants “client service associates” or CSAs. At Merrill Lynch they're called client associates (CAs); Smith Barney has a handful of names for its sales assistants.

In fact, some of our readers were just downright confused when we asked them about their status as sales assistants. “Can you tell me more about what you mean by ‘sales assistant?’” asked one. “I don't think we have that role [here].”

Some even seemed to take offense at my use of the word. Says one Smith Barney advisor, rather indignantly: “Those of us who serve as trusted advisors do not think of our roles in terms of sales; we think in terms of service. We are concerned with effective wealth management, which means capital preservation, risk-adjusted returns, identifying and achieving realistic goals, managing tax liabilities, etc. Our function is process-oriented, not product-driven. We train our staff members to be trusted associates; they are not servants or lackeys. Therefore, correctly stated, we have service associates, not sales assistants.” (Okay, I got it!)

In truth, this advisor has a point. Google searches for “sales assistant” come up with few results, and the same thing goes for the word “broker” — at least when associated with advisory firms. Just as advisors have mostly shed their sales personas, it seems “sales assistants” have outgrown their sales assistant roles. Check out page 59 for some of our Outstanding Sales Assistants, who have proved to be much more than their titles imply. — CM

HOW THIS SURVEY WAS CONDUCTED: From the end of July through August, Penton Media's Marketing Research unit emailed 1,071 Registered Rep. subscribers. Subscribers indicating a job function of Sales Assistant were specifically selected. The survey's effective response rate was 14.1 percent.

COMPLIANCE PROS

SAs WHO SPENT HALF OR MORE OF THEIR TIME ON COMPLIANCE DUTIES

SA COMP BREAKDOWN

MOST SAS ACT LIKE ADVISORS

The Portrait Of A Sales Assistant

MEDIAN