Setting the Record Straight Re: Bill Singer

I owe someone a major apology for something I wrote last week which was completely disingenuous to their standing and reputation in our industry.

It all started when I read an article in Forbes that I felt was insulting to professionals in the brokerage and advisory industry.  Since I’ve started my career, I’ve seen a parade of epitaphs written for the Stockbroker, and upon seeing this latest piece I had felt that enough was enough.  My reaction to the article came out roughly an hour after I read it, so to be sure, there was a great deal of emotion involved in my writing.

Unfortunately, in the course of defending my profession, I made a major mistake.  I unwittingly insulted a man who has done more for the independent and regional brokerage industry than perhaps any other person in the country.  That man is Bill Singer, an accomplished securities attorney, former regulator, brokerage industry advocate and writer of the BrokeAndBroker blog, the online hub for all things compliance, regulation and broker/dealer-related.

What follows is my public mea culpa for taking Bill’s comments out of context and for allowing my disdain for the article’s premise to cast Bill in a negative light.  He was merely a commentator in the piece and as he has spent more than two decades working for the improvement of our industry, I should have thought better than to rope him into my rebuttal.

Here is my true opinion of Bill Singer and his viewpoint on the subject, for the record:

There are many financial bloggers, but most of them are either individual traders, anonymous mudslingers or experts from the hedge fund/ investment banking worlds.  There are very few from the broker/dealer world, but Bill Singer was one of the first and is by far the most prolific.

Bill’s background gives him the ability to comment on the industry from many different perspectives as he’s been employed on both sides of the regulatory fence and has even gone the dissident route during times when lack of common sense or conflicts of interest had threatened the level playing field that he so truly wants to see.  For this reason, Bill is a highly sought-after commentator; his opinions are seen regularly in Registered Rep Magazine, on the Canadian Broadcasting Company‘s stations and he is also a regular panelist for Forbes’ Intelligent Investor series.

One aspect of Bill’s career that not many people are aware of is that he had repeatedly warned about the negative consequences of a diminished regional brokerage tier.  Sure enough, the top five investment banks, with their new-found most favored nation status became drunk with power over the last decade and nearly brought the world to the brink of fiscal collapse.  The crisis we find ourselves in now may have been avoided or at least mitigated if Bill’s admonitions about the danger of having just a handful of large firms control Wall Street had been heeded.

I should also mention that Bill was one of the first people online to recognize my work and reach out to me.  We immediately recognized the benefits of coordinating our efforts to reach the brokerage and compliance industry together.  To be acknowledged and encouraged by someone of Bill Singer’s stature was one of the most meaningful milestones in my career.

If I accomplish anything with this post, I hope it will be a rectification of my taking Bill’s words out of context.  His commentary was not meant to be taken as a variation on the old Death of the Broker meme.  In fact, Bill feels very strongly that with reform and a realignment of priorities, there is great potential for the Broker to transcend his traditional role as salesman and become something much more respected and helpful to investors.

Here is an example of how Bill feels this can be accomplished from his August 6th Forbes piece (link to full text follows this post):

In keeping with my call for uniform disclosure, I urge the adoption of a single Fiduciary Standard for all FSPs (Financial Services Professionals). We must demand that FSPs work at their employer’s company but always for their clients. We must also insist that FSPs are subject to a strict Fiduciary Standard that exalts the client’s best interest above all else.

The current Suitability Standard that has held sway on Wall Street for generations must be abandoned. It’s just not good enough–not anymore–for a financial professional to only have to find something that’s suitable for his or her customer. No, the job– the profession–must demand more. It must demand that you find the very best that you can for your client, and that you never, ever consider how much goes into your own pocket when recommending investments.

Bill also offers solutions for the problems of titles, compensation, regulatory disclosures and most importantly, the issue of firms taking advantage of and pressuring their salespeople.  I highly recommend that anyone in our industry who cares about our future review these proposals.

My characterization of Bill Singer in the regrettable post I mentioned earlier could not have been more off the mark.  Amidst the cacophony of calls for reform, we are lucky to have him as a stalwart advocate and voice of reason.

And I am lucky to have him as a colleague.

Read more on Bill Singer’s reform proposals for the brokerage industry and it’s participants:

Becoming Part of the Solution (Forbes 7/28/2009)

The Death of the Salesman (Forbes 8/6/2009)

Bill can be read regularly on his own blog:

Brokeandbroker.com