Our vision is to go beyond being your protector against the forces in the industry that would stifle competition.
The National Association of Investment Professionals (NAIP) is celebrating its fifth anniversary! No other organization representing reps and advisers has achieved this milestone.
The NAIP is the only association that continually monitors and comments on laws and regulations affecting brokers proposed by the SEC and the NASD. It has lobbied on your behalf regarding issues such as arbitration, qualified immunity, temporary restraining orders (TROs) and policies concerning employment records on the CRD.
The organization's success in impacting some of these policies is documented. But interesting developments are still occurring in one area — TROs. For years, firms have filed TROs with impunity against brokers changing firms in an attempt to keep customers from moving with the brokers, and the NASD quietly allowed this. I mentioned in my March column that the NAIP was seeking legal counsel regarding the possibility that TROs were a restraint of trade. In May, the NASD announced it does not approve of the practice — a 180-degree turn. Its statement read:
“In an effort to prevent former broker employees from taking existing customers along with them when they change firms, some brokerage firms have sought TROs to prohibit the transfer of customer accounts. The NASD determined that is not consistent with just and equitable principles of trade for a firm to take any action that interferes, delays or impedes a customer's right to transfer his or her account.”
The NASD also released a comment from its CEO and President Robert Glauber. He said: “In developing this rule interpretation, we have sought to balance the needs of customers to access and control their brokerage accounts with real competitive concerns of firms. A customer should not be deprived of brokerage services while the broker servicing the customer's account tries to resolve an employment dispute with his or her former firm.”
As you may know, the NAIP filed a petition with the Federal Trade Commission to stop online trading companies' deceptive ads. Within two months, the ads stopped. Our willingness to tackle that matter apparently gave us credibility with the NASD when it came to the suggestion that we were considering an antitrust case against the industry for its use of TROs. In other words, sometimes you just have to threaten to throw a rock — you don't have to actually throw it.
The Next Five
Our vision is to go beyond being your protector against the forces in the industry that would stifle competition. During the next five years, we want to help you become more competitive as individuals. To do this, we will be providing a variety of discounted products — from insurance to protect your family and computers to run your business to discounted office space and temporary employees. We will be adding new board members and systems this year to expand into these services.
As president of the NAIP, I would like to thank those who helped the organization reach this anniversary. They include Registered Representative's Editor in Chief Dan Jamieson and Publisher Rich Santos, Alan Foxman, chair of our Government Relations Committee, and outstanding board members like Tim Carsick and Brad Moser. These people and others have put a great deal of time and effort into a group that champions all of you. And it's my hope that many more of you will become involved in the NAIP in the years to come.
T. Sheridan O'Keefe is a registered rep based in Minneapolis, and president of the National Association of Investment Professionals, a trade group for brokers and advisers. The NAIP can be reached at 952/322-6247. He can be contacted at [email protected].
