People & People


Support Grows For Super Advocate In FINRA Election

Many financial advisors affiliated with broker/dealers with fewer than 150 reps are taking more than a passing interest in the August 2 election to the board of the Financial Industry Regulatory Authority (FINRA). Mindful that their own fortunes are closely tied to those of their small BDs, these advisors are rallying support for Lisa Roth, chairman of Member Advocacy at the New Jersey-based National Association of Independent Broker/Dealers (NAIBD).

Roth is being heralded for a long string of accomplishments in political advocacy, the most recent being her apparently successful “lone ranger” efforts to exempt small firms from Sarbanes-Oxley internal control requirements. All broker/dealers are required to submit audited annual financials to regulators. Without the exemption Roth sought, small, privately-owned BDs would have to use auditors registered with the Public Company Accounting Oversight Board (PCAOB), which was created by the Sarbanes Oxley Act, passed on the heels of the Enron scandal in 2002. Because of the extra work they must do to satisfy regulatory requirements, these auditors (accounting firms) charge more than smaller, non-registered firms. This substantially increases broker/dealer audit costs and, by extension, impacts negatively on advisor commissions.

Small, privately-owned broker/dealers were exempt from having to use PCAOB auditors until 2008 when it became known that it was a small, unregistered accounting firm that signed off on Bernie Madoff’s financial statements. The Securities and Exchange Commission (SEC) then let the exemption lapse. Since then, there have been a series of temporary deferrals for smaller companies, the last of which expired June 15.

Since the 2008 SEC action, broker/dealer organizations have sought legislation providing a permanent exemption for the smaller firms. Seeing no apparent progress, virtually all of the advocates backed off the issue – all except for Roth and her organization, the NAIBD.

Instead, Roth doubled her efforts – personally calling dozens of representatives and senators and enlisting a crucial ally: the American Institute of CPAs.

Payoff came late last month when the House/Senate conference working on the massive Financial Regulatory Reform Act adopted a provision giving smaller companies a permanent exemption from Sarbanes Oxley internal control audit requirements. At press time, the full House had passed the bill and a Senate vote was expected in mid-July. If the Senate passes and the President signs the bill, small broker/dealers will not have to use the more expensive PCAOB auditors.

New Association For Hispanic Insurance Agents

A professional association for Hispanic insurance agents – Latin Agents and Brokers Association (LABA) – has been established on Long Island and hopes to expand throughout the northeast. The founding Chairman and President is Elmer Rivera, manager of the Jimcor Agency, Plainview. He said the organization will provide a forum for mentorships on the cultural nuances within the Hispanic community and a place where carriers can reach a growing population of agents and brokers.

Rivera said the organization is not looking to compete with other long-established insurance organizations since most of his life, health and p&c members are also members there. But he said many Hispanic agents feel they “need their own unified voice to promote the buying strength of the Hispanic insurance consumer and to facilitate marketing to this growing demographic.”

LABA will hold its inaugural membership meeting in late July in Freeport, LI. At press time, details were being finalized. For updates, go to the FA website –

www.financialadvisorpublications.com Then go to “Meetings and Events” and select “Long Island.” You can also call LABA’s corresponding secretary, Elsa Fernandez, at (631) 531-9595 x3304 or Rivera, himself, at (631) 531-9595 x3301.

FA