September 26, 2019 | ARTICLE | BY KELLY LYNCH
They say that no good deed goes unpunished. For many registered reps with only a Series 6 license (the classic example is a rep working in an insurer-affiliated b/d), their daily experience of the maxim is when they help clients model out a simple, fund-based asset allocation and then construct a portfolio out of mutual funds. Or, having done all that for a client, they might periodically review the allocation and help the client rebalance.
In theory, Series 6-only reps don’t mind coaching their clients on portfolio construction and management. It generates goodwill, good investment outcomes, and maybe pays out a few commissions along the way. More importantly, it’s sort of come to be expected of them.
But these good deeds can be laborious. For new accounts, it entails working with the client to knock out the reams of paperwork associated with direct-at-fund investments, often at multiple fund families. And for rebalancing, it can mean gathering up account statements from multiple sources and plugging them into the model by hand (not to mention a whole new set of account-opening paperwork to the extent fund changes are in order).
It’s hard work and, to make it all the more painful, it’s the kind of hard work that other advisors—RIAs, for example—get paid handsomely for.
We can’t help with the getting paid part– or the allocation advice– but we’ve been talking to a few organizations lately about how we might help with the hard work part. An omnibus solution such as FundKeeper has the potential to make Series 6 reps’ lives much easier by streamlining mutual fund account opening processes and providing consolidated investor account reporting across fund families and graphic tools for when it comes time to consider rebalancing. The FundKeeper underlying technology is also able to support an unlimited number of Rep designed investment models and automatically rebalance the account to the model.
For the broker/dealer, such an approach could mean cost and time savings and a tighter compliance process—it could even prove to be a differentiator when it comes to rep recruiting.
Series 6 reps want to do good deeds for their clients as much as the next guys. We just think they shouldn’t be punished for it.