About Getting Financial Planning Software Approved for Use
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First, here's a generic 2005 Finra response to the question of their roles in approving financial planning software:
As you know, Reps may use only sales material that their firms (through internal compliance departments) allow them to use. We are all aware that there can be internal struggles between marketing and compliance over what is acceptable and what isn't. If there are products or services you want to provide, but feel like you're not allowed, you will need to handle it internally. I would think raising it with your Branch Manager would be the first step. Finra staff does not force a firm to begin using a certain product or to allow the use of a product that it has chosen Not to Allow - those are firm based decisions. I understand the issue you've described, but we generally do not intervene regarding these types of business decisions.
Our staff works with compliance officers on a daily basis to review sales material. We receive financial planning software through the filing process and review it accordingly. Some of the programs are required to be filed, others are filed on a voluntary basis. Some firms submit compliant programs, others do not. Compliance officers may have several reasons why they do not approve certain software programs. If a software program is prepared by a third party, the Broker Dealer firm has little control over the content, ability to revise the existing version, or on-going revisions to the program. If a compliance officer determines that his or her firm should not use a particular program, that's their decision. If the compliance officer approves a problematic piece of sales material then they take a huge risk for themselves and the firm.
Financial planning software, when used with the public, is generally defined as a communication with the public. The rules regarding Finra members' communications with the public can be found in Finra Conduct Rule 2210. All communications with the public require approval by a Finra member firm's compliance department prior to use, but not all communications require filing with Finra Advertising Regulation Department ("the Department"). Depending on the communication's content, some financial planning software is required to be filed with the Department. We direct your attention to Finra Conduct Rule 2210(c)(2) and IM-2210-6 for some of the Rule's filing requirements. Financial planning software must be looked at on a case-by-case basis to determine whether or not it must be filed with the Department. If you need assistance, you should talk to the compliance department of a Finra member firm, and if the compliance personnel have questions, they are welcome to contact us. Finra Conduct Rule 2210 and IM-2210-6 may be found online in the Finra Manual.
All communications with the public used by registered Representatives are subject to Finra Conduct Rule 2210. They may be subject to the rules of the other regulators also, depending on the subject matter of the communication. This rule applies to communications about all products and services including financial planning software regardless of whether specific securities are identified. Under the rule, financial planning software is considered within the definition of Sales Literature. There is no separate sub-category for financial planning software. Finra requires that a registered principal at the Rep's firm approve internally all sales literature prior to use. It is the principal's responsibility to make sure the material is in compliance with the rule and to determine if the material must be filed with Finra. The rule requires, among other things, that sales literature is fair, contains risk disclosure, does not contain misleading information and does not omit material information. The rule generally prohibits the use of predictions or projections of performance.
Then their "new" piece about this can be downloaded from here: Finra Conduct Rules (2012 Advertising Regulation Conference).
Rule 2214 on page 128 clearly says: "No member may imply that Finra endorses or approves the use of any investment analysis tool or any recommendation based on such a tool."
Here's their old piece that says: "The filing requirement does not apply to hypothetical illustrations of mathematical principles that do not predict or project the performance of an investment or investment strategy, such as Web site calculators that compute future returns based upon assumed variables, since Rule 2210(d)(1)(D) does not prohibit (and IM-2210-6 thus does not cover) such illustrations."
In case you didn't know, if you are a BD or a Finra Rep, then you are a Member.
The bottom line is that our financial plan software falls under the "Hypothetical Illustration" Exception to Rule 2210, and does not need to be filed with Finra.
What Does All that Mean?
Before explaining all of that, here's some new facts after talking with Finra in April '13:
It's now "illegal" to say the words, "Finra approved."
A Finra Supervisor said that enforcing this rule is like cops giving out speeding tickets - everyone does it, and only a tiny fraction of people are actually caught doing it. But over time, those that are caught and "punished" will tell others, so eventually people will use these banned words less.
Finra does not "approve" or "disapprove" of anything.
There's no such thing as a "Finra approved list," but there is a list of programs that didn't pass their review process. Finra calls this the, "Do Not Use" list. None of our money software is on this list!
If a member firm (BD) asks them to review "material" (e.g., software), then they will. So if a financial planning software vendor like us has had a BD submit it to them for review (which many have over many years), and they did not come back with a list of things that needed to be "fixed," then it passed their review.
They didn't say what words they actually use, so "pass" is incorrect too. They said, "We'd sent it back without a list of concerns that need to be addressed."
What is not correct, is the word "approved," because Finra does not approve or disapprove of anything at all.
If something does not pass review, then there's no word for that either, so they'll say things like, "Here's the list of concerns that need to be addressed. We'll review it again after they've been resolved and you resubmit it for review."
It's only when material has so many problems that they think it's beyond hope, that the result of their review would be, "Do Not Use."
Then there is no "list" of vendors for the two categories of "okay" and "fix and try again." But there is a list of "Do Not Use," but they don't publish it or give it out. But if a member firm asks them to review something and it's on the "Do Not Use" list, and it's the same version, then they'll tell them it's on the bad list.
So it appears that the bottom line here is that when a member firm requests a review of a software program, it's only going to fall into one of two categories.
The first is, it's "okay" and then the buck is passed onto the member firm (BD) to "approve" of it or not.
Then the second category is, "This is the same version as the one we labeled "Do Not Use," so until we get a new version that's completely different, it stays in this category." The middle category is just one of being in "limbo."
When BD's say, "MoneyWhatever is Finra approved," this is not only technically incorrect, but has been "illegal" to say for several years now.
All Finra has to say about that is that someone at Finra reviewed MoneyWhatever, and didn't find any egregious errors that could bring harm to the investing public.
So then they tell the BD that they don't have a problem with MoneyWhatever, so the ball is back in their court now. Then the BD "approves" of it, and then Reps can use it for their client plans.
So this very complex, evolving, and confusing process is the source of what Finra calls, "The Great Misunderstanding" in the industry.
So since the beginning of time, BDs have been running around saying, "You can only use the financial software on our list, because that's the only program that's been Finra approved."
This would read like this after passing through a "truth translator:" "We have a list of financial software that we like, for no better reason than the personal preference of a few people in BD management (that may have never even been a Rep in the Real World nor met with an actual client in person), and maybe some hidden kickback money to us from the software vendor. So it's all that WE approve of you using for your clients. We're just lying and using illegal wording when we say Finra only approves of this list. This passes the buck of responsibility off of us and onto Finra, which we know you're too lame to investigate and get to the bottom of what's really going on. So don't hate us, hate Finra for this! They're the ones that approve or disapprove of everything you can use or not. Then we just don't care because we make the most money, and do the least amount of work like that, and so far nobody has forced us to change our ways yet, so we're just going to run with it forever because it works best for us. If you don't like it, then you're terminated if you want to make a fuss."
So a bottom line is that if anyone says any of the following things, then they should be "corrected" (and if they refuse to stand corrected, then they should be reported to Finra, so they can "straighten them out"). Some examples of things that are not legal to say anymore are:
- The word "blanket" in the same sentence as Finra is also frowned upon.
- ...is Finra approved.
- ...is not Finra approved.
- Finra has approved of... (this software).
- Finra has not approved of... (this software).
- My BD won't let me use this software because they say it's not Finra approved.
- My BD says I can use this software because it's Finra approved.
- This vendor says I can use their software because it's Finra approved.
- This vendor says I can't use this other vendor's software because it's not Finra approved.
Etc. and so forth, you probably get it by now.
Back to trying to condense all of these generic concepts into plain English:
The short version is that everything a Finra Registered Representative shows or gives to the public must first be approved by the Reps' Series 24 Principal in their Branch Office, and/or their Broker Dealer's Compliance Department.
This includes even generic financial planning software that doesn't have anything to do with investments. So even running a simple college funding report is considered to be "advertising and/or sales literature."
All types of this literature needs to be "approved" prior to communicating it to the public in any way.
"The public" means anyone that is not a Registered Representative with Finra nor a Member Firm.
These rules do not apply if you are an RIA (Registered Investment Advisor) and are NOT also a Finra Registered Representative. Although you're still under the jurisdiction of your state until you manage $100M in assets, then you're under the SEC's jurisdiction.
Either way, they don't have any of these rules regarding what you can or cannot use in the way of generic communications or financial planning software. So as long as you're wearing a "White Hat" you can use anything you want to. The BD / Finra and RIA / SEC worlds are totally different.
So if you are a Registered Representative with Finra, then this presents many serious Real World problems, if you want to make a living using great financial Tools For Money to advise consumers and investors about financial planning, forecasting their financial futures, and/or investing their money.
Critical little-known fact about BD / Finra approvals: Keep in mind that it's not the software that needs to be approved to use it, but the actual reports you make from it (AKA "material").
So after you, buy, learn and then make an actual report for a client or prospect, then you submit the paper reports you want to give or present to BD compliance, then that's what they'll approve or not.
So even if your BD "blanket approves" of a software vendor, that still may or may not mean that you can bypass this process of getting an actual report approved for use.
So even though software may be "blanket approved" does not mean that you won't still have to submit reports made from it to compliance. Sometimes you'll still have to submit them.
The point is that if you still have to submit the actual reports you show or give to clients, then our software is just as approved as any other.
Next, realize there are four players in the process, that serve as the "Chain of Command," that you're best not to even think about circumventing in any way.
It starts out with your Branch Office's Series 24 "Principal." This person may also be the Alpha Doggy of your office, which is your Branch Manager.
Your Branch Manager is also "a 24," but they may have delegated these annoying duties to a lower-ranking 24. So getting things approved may not have to reach the Branch Manager level if there's a 24 below them in charge of such things.
If your request doesn't make it past them (they just passed the buck), then they will submit it to your Broker Dealer's Compliance Department.
These Principal 24's outrank your Branch Manager in such matters.
If your request doesn't make it past them, then they will submit it to Finra, which are the ultimate authorities. All bucks definitely stop at Finra. You don't want your request to have to go to Finra, as it may cost real money and take a very long time.
Please note that even if Finra says it's fine, any of the three other players can refuse to approve it, just out of "personal preference," they just don't like it, they don't like you, they don't trust you, you may "know just enough about the biz to be dangerous," you're not being a "team player," or whatever - it doesn't matter.
So even if the Finra alpha dog says it's fine, you'll still have to abide by the decisions of ALL of the lower-ranking dogs.
Basically all four players have to approve it, or you can be "terminated" just for that (with a bad mark on your U-5, which will make it very hard to join another BD).
This is why this page is here, so you can better understand all of this, so you can stay out of trouble (and maybe even avoid it all in the first place, which is definitely what we recommend doing after being around all of the blocks several times, even being employed as a low-ranking 24 for many years).
So what do you need to do to use this financial plan software, or any other? Well, just ask them.
Start with your Principal / Branch Manager that holds a Finra Series 24 license. They know all about it, as all of this is one of their primary functions. They've more than likely been around the block hundreds of times about everything you can think of in this regard.
Start by printing out either a live report made from the actual financial software, use reports in the free sample financial plans, or demo's presentation pages, then associated downloads, text that explains the reports to clients, and even maybe the user manuals.
Then BDs all have standard legal request forms / cover letters ready to go just for this purpose (Advertising / Sales Literature Approval Request Form).
So just fill out the form and attach it to front of the report batch (so when someone gets it, they'll know exactly what it's all about). This usually does not cost the Rep any money.
Write the date you submitted it on the front page of the reports too in case the submission form gets "lost." Then make copies of everything, including the compliance submission form. Keep a copy and give a copy to your firm's Principal. Your Principal may want you to give two copies to them, and once they say it's okay to send to compliance, they'll send one of the copies off to them. Compliance likes it better when it comes from a 24, and not from you.
Then they will do their things and will respond. This takes at least a week, unless your Principal / Branch Manager can approve it themselves, in which case it could take just a few minutes.
All of the generic financial planner software on this site should make it through this process, even if it has to both go through BD compliance department and Finra, no problem (as we, and hundreds of Reps, have done it all before).
Most Broker Dealers will approve financial planning software, but only if the Rep takes the time to formally submit it to them using their submission forms.
But if you just ask them if "they approve XYZ software," they'll most always just say no. This is because very few financial plan software packages are "blanket approved" for use by all Reps, no questions asked.
This is because once a BD goes through the arduous, time consuming, and expensive process of getting a particular financial plan software platform installed, approved, integrated into their other systems, then send Reps to expensive formal training classes, they're stuck with everything for decades, because they don't have the resources to go through that whole process again. Then, to protect this huge investment, then they just don't let their Reps use anything else via their (mostly fake) compliance approval process.
So that's right, you sometimes can't do what's best for your clients, mostly because your Broker Deal is "broke and broken." It's just as simple as that. There's sometimes nobody even there to even do this work, because they were all terminated due to having no money to pay them.
If you're now thinking this is a totally broken system, then you are correct. We're just pointing out the mechanics of why. When the whole financial services industry is contracting, like it has been since '01, then there are just no resources to do any better at this. The whole BD / Finra world is totally and hopelessly broken, with zero chance of being fixed, probably forever.
So if you just follow your BD's submission process, and the chain of command, then most will approve most anything that looks reasonable (because most all financial plan software is basically just the same thing just wrapped up in a different wrapper and then presented a little differently).
Although most BDs will approve our financial plan software when properly submitted, we specialize in the no-conflict of interest, non-BD world of RIAs, where there's nobody "in power" saying, "No, you can't do that."
So you're not paying "monopolistic prices" here for financial planning software. A quasi-monopoly is formed when a large BD only approves of a particular software vendor.
All of the financial plan modules on this site have been approved by several BDs when submitted correctly. Sometimes, they say it has to be sent to Finra. If they say you have to submit it to Finra, then you may be in trouble. Or if they just say NO without even taking a look, then you're definitely in trouble.
Good BDs will either do the due diligence themselves and say yes, the mediocre ones will say they need to send it to Finra to get an opinion and approval, or the bad ones will just say no. Now we're getting into the red meat.
Why You're Always Being Told: NO!
Why do Broker Dealer compliance officers say no when asked about the usage of generic financial planning software?
What a good Principal and/or compliance person should do when they get the submission, is evaluate it themselves. Then if they think there is something investment-related that might need to be clarified before approval, they'll fax it to Finra.
Compliance officers have an open line to Finra, so they can usually get the information to someone the same day, and get an answer back in a day or two.
Then Finra is just going to say it's okay to use all of the generic financial planning software on this site as is. We know because we've been there and done that with many good BDs in the past (plus constant feedback from hundreds of customers).
When things are approved, you'd then edit the Footer (View, Header and Footer) in both Word documents and Excel spreadsheets (you can do this even if they're protected with a password) to reflect the BD and then insert the compliance approval number (after deleting our copyright, which is fine, that's just to keep people from trying to resell it).
It's the compliance officer's job to use this procedure to get software approved for use by Reps. If they don't do it like this, then you could just have a bad compliance person.
These days, many BDs are in survival mode, so they may just pooh-pooh everything just to get you out of their hair, and to avoid every little thing that has any remote chance of causing trouble, "wasting time," or costing money. If so, then it's just a matter of time before their troubles get passed onto you.
You're in trouble if your compliance person just says no, or doesn't want to submit it to Finra. Then compliance is not doing their jobs, and you'll need to get with your BD management, to get to the bottom of the issue.
So if compliance is not giving you answers to your satisfaction, then you should definitely escalate the issue all the way to the top of the BD food chain to get to the bottom of it.
This is a place you planned to "work at" for decades. So you want to know if your compliance person just needs to be Replaced (top management also needs to know this, and may thank you for pointing it out), or if top BD management is the one behind your compliance departments not doing their things right.
If it turns out that compliance wants to do their jobs right to help you succeed, but they're under orders by top management to not approve this or that software, then that should be the last straw (because this is just the tip of the iceberg that will sooner or later sink your whole ship).
So they'll put their self-interests ahead of the Reps, the clients, the investing public, and play along in a New York minute. So if your BD says they only approve the big code-driven financial plan software platforms, then this is probably why. These vendors are also probably just kicking back money (to BD management) in return for not approving any other financial plan software.
This may work for them in the short run, but over time, they're going to lose the best people, because they'll leave and go to a good BD where they can run their practice the way they want to, and that puts the Reps and investing public's interests first. That's how you make real money in the long-term. Or real talent will bag this whole obsolete BD business model, and become their own RIA.
Compliance officers also live in a world of fear. If they're negligent, they could be held personally responsible (which means they could end up paying lots of money from their own personal bank account).
So to protect themselves, some just "Say No" to everything they can't get a black and white answer to, or things they are afraid of, or things they don't have time to research, just don't like, or don't understand.
All of these things may pass Finra's approval process, but may be banned just because of the narrow vision of a compliance person's, or BD management's personal opinion.
So you really need to get to the bottom of this ASAP if you plan to stay in this business. The longer you stay with a bad BD, the more these types of problems compound, the more your efforts to succeed in this business will be thwarted, and the higher the odds are that you'll be back at your old day job next year.
It's usually only the "good" big BDs, which will let Reps use what they want if it's properly submitted. In general the smaller the BD, the more likely it is that they'll approve anything you want to use. The more "White Hat" the BD is, the more they'll approve ours, and similar financial software.
But the flip side to this is the more the BD is controlled by a life insurance company, and thus more "Black Hat," the less likely this will be. This is sometimes because of things like this (that our financial tools excel in):
Our financial plan software is geared toward showing clients the truth about what they need in the life insurance area. For example, we have accurate life insurance needs calculator, which makes it unlikely to over-inflate actual capital needs.
If you could wave a magic wand make it so all life insurance sales only covered actual needs, and no more, then most all big life insurance companies would go belly up in a few years. They basically live or die by agents' abilities to oversell what's really needed most all of the time (and then there's the "fixed annuity problem and then the variable annuity problem").
Our life insurance calculator also accurately projects capital needs far into the future. This clearly shows people that needs dramatically decrease over time. Whereas life insurance companies want and need insureds to keep buying more more more regardless if they need it or not. This is definitely not in their interests.
We point out how most all life insurance company products are just "not good" in general. For example, we're the only ones that debunk myths that whole life insurance of any kind is good for anyone, with a buy term and invest the difference calculator.
So the more life insurance oriented your BD is, the more you will hear NO when trying to get our financial plan software approved (and similar vendors).
Just about the only thing generic financial plan software has in it that can raise a compliance eyebrow are the assumed rates of returns. These are the exact same rates of returns that the Reps are able to input into all of the code-driven financial software, so this is not a valid argument.
So we specialize in the RIA market, where advisors can freely buy and use what will work best for their clients - not what makes the BDs (or their parent life insurance company) the most money.
If you don't think the financial world works like this, then just try to get to the bottom line on why BDs "blanket approve" of only a few financial planning software vendors.
No matter whom you talk with, no matter how high up on the BD food chain you go, you will not get any actual answers. It's all a huge mysterious secret.
So it's more than likely all about who gets invited to parties and to go golfing with whom and whom is scratching who's back and expecting to have the favor returned. This is how most everything on "Wall Street" works (and how America works in general).
So more than likely there's no logic or wanting to do the best things for consumers and investors going on, it's just people abusing the power they have to do the best they can for themselves and the good 'ol boys on their teams.
You can verify this by calling most any BD and ask which software they approve. First, they won't tell you because the lawyers put a clamp on that because that would shine light on the kickback deals. But if you can get them to, the big and bad life insurance-controlled BDs will say it's only the big code-driven financial software.
Please let us know about your experience by telling us exactly what they're saying. We love stories about the state of the world, and we give free software if you can inform on something we didn't know and/or teach us new tricks.
You Are the One that Has to Determine the Reality of the Situation at Your BD, if You Want to Succeed in this Business!
Nobody else is going to tell you if something really can be used or not, according to Finra, unless you figure it out yourself. If you leave it to your Principal or compliance officers, then you may be stuck being told "it's either our way or the highway."
You may make a little more short-term money like that, but you won't make the big long-term money. Your long-term success in the business depends on consistently giving clients what they want and need in a world that's always evolving forward (and away from everything that's being whined about here - which is basically the desire to keep doing financial planning and investment management as it was done back in the Stone Age).
Compliance officers also want to just tell you that everything you ask them to approve has to be sent to Finra for approval. This is just passing the buck, and/or they're hoping they will annoy you to point of just going away and forgetting about it. As you know, this costs you time and money.
For example, when we personally worked as an employee, and Finra Rep, three BDs approved the Model Portfolios without submitting them to Finra by the competent compliance person just reading the rules and coming up with a list of things that needed to happen to get them approved.
But when we did the exact same thing with Royal Alliance / AIG, compliance immediately said EVERYTHING needed to be sent to Finra to be approved. They wouldn't even approve our Financial Plan Fact Finders, which obviously has nothing in them that can be out of compliance. They didn't even take one minute to think about it, nor look up the rules about using investing models.
This was AFTER the other three BDs already approved them when we did it in-person as a 24. After more research, they finally admitted to just being a "NaviPlan only BD."
So in our opinion, Royal Alliance / AIG is an example of a "very bad BD" that should be avoided like the plague. This was 2004, and our predictions of what happens in big bad BD world was proven right - they (AIG) went under big time, and the taxpayers had to bail them out to the tune of $182 BILLION (or 92% ownership), just because they were "too big to fail."
While on the subject, there's only been one time where a customer went through the whole BD IPS approval process and didn't get it approved.
Get this - the BD said he couldn't use it because they were afraid the Rep wouldn't follow it! That's right, "We don't want you to do anything good for your clients, like use an IPS, because we think you're too stupid to actually manage their money according to its guidelines, then that's just going to get us into trouble!"
Then this BD is also a MoneyGuidePro only shop - so they won't let their Reps use anything but that for their financial planning software. Believe it or not - this BD is Morgan Stanley! This is so unbelievable, if it was so sad it would be hilarious.
You'd think they'd just do a search for "training programs for salespeople" and do some basic financial planner Rep training. But nooooo, it's easier and more profitable short-term to keep the Black Hat on and continue to conduct business as if was still the 20th century.
Read more about the obsolete Broker Dealer business model - and how people keep trying to squeeze the last dollar out of something hopelessly broken and eventually going the way of the dinosaurs.
The first clue that the whole commission-based biz model is slowly being replaced, was AIG (and its dozens of life insurance BDs), Merrill Lynch, et. al just completely going under and having to be bought or bailed out with taxpayer funds to survive the financial meltdown.
So it's totally 100% up to YOU and only you to do all of this hard work, and decide which route to take in this biz - the hopelessly broken obsolete Finra / BD world, or the only mostly-unbroken RIA world, which is the way of the future, so there's plenty of hope still left.
Here's some observations when conducting the reviews. The first thing I noticed is how many firms "went under" since I did this in '05: Microsoft Money just gave up and went under. Even the firm with the #1 and #2 Broker Dealer financial plan software went under AGAIN in the 21st century (NaviPlan and Financial Profiles).
The next thing is something I suspected since working for Royal Alliance / AIG in '04: Most sales of NaviPlan, Profiles, and the MoneyWhatevers are "forced sales."
For example, if you worked for most of AIG's BD's in 2004, then they only allowed you to use them. The point is that so far, I have yet to run into even one RIA fee-only advisor without a BD / Finra attachment, which uses MoneyGuidePro or Profiles. Maybe 5% use NaviPlan.
Some RIA's with BD's use them, but once the BD is out of the picture, then so are these vendors. So when you're free from BD tyranny to use the money tools that will do the best jobs for your clients, then "nobody" buys "BD software."
I thought this was so in '04, which is why I decided to make the IFP, but this current round of poking around to see what everyone else is up to confirmed that theory.
So the question you need to ask yourself is, how would your life be affected if your BD just went under? Here's a Word docx with article pastes showing just how much they do go under.
We can't think of anything good that would result from that. The chances of a BD, or its parent company, going under is directly proportional to how "good" or "bad" they are (have been, or are going to be).
Spotting the bad ones before you join up is very hard, so all we're saying is that one great way of determining if a BD is bad, is just by going through the arduous financial planning software investigation and approval process BEFORE you sign anything.
The best way to find the spiders lurking in the shadows waiting to suck your blood while you sleep, is to shine the light of day squarely onto them. If they try to run and hide from the bright light of day with, "We can't give you any opinions, nor approve any financial plan software until you become a Rep, even though I as the Branch Manager and Principal have the power to submit anything I want to compliance and get an opinion back in a day or so, free of charge, whenever I want to," then you'll have an idea of what these spiders be doing to you when you go to sleep.
Keep in mind that the Branch Manager is / was usually the top "salesperson" in the office, so if anyone can sell ice to Eskimos (without telling them the freezer requires electricity, which they don't have), then this is the best person in the office to do that. So they'll always be telling you about all of the good things about "working" there, and none of the bad things.
Not being able to use the basic financial tools needed to do your job, is a very bad thing (that they're great at neglecting to tell you in advance, then will deny after you sign up and are stuck like a fly in a spiders web).
The Critical Bottom Line
So the lesson here is that you, the financial planner and Finra Registered Representative, need to do this kind of research BEFORE you sign up with a Broker Dealer.
Doing it any other way would be like being a carpenter, hired by a firm that doesn't pay anything to pound nails all day, and then when everything is all set up and you start to work, they say you can't use your normal claw hammer, so you'll have to use a ball peen hammer; which they'll be happy to sell you of course, and guess what, you even get a discount!
But then you say you can't pound nails at all with a ball peen hammer, so what's the deal? Then they say they know, and feel your pain, but that's how we do things here, and it's just our way or the highway. You should have asked what kinds of tools you can use to do your job before you signed up for that, huh? This is the exact same thing with BDs.
To bad BDs, it's around a 90% chance that you're just going to be a less than one-year flash in the pan anyway, because that's their average. So all they really care about is how much money they can suck out of you during this period.
So take their sales pitch with a grain of salt and stay focused on what your life is going to be like living under their regime day in and day out.
The best way to do this is to grill any long-term Reps about how they feel about the financial planning tools they're allowed to use. You must interview at least the top Rep in the office AND a barely surviving rookie in the office. You want to find out what's making the top Rep so successful, AND why the rookie Rep is still barely surviving.
If the Branch Manager won't let you interview them (usually because they're "too busy"), then do not join that BD, it's as simple as that. What they're doing is just keeping all of the bad parts of your daily life hidden from you, until you sign all of their contracts, and it's too late to back out (without voluntarily terminating, losing your money, having a questionable termination on your U-5, then having to start over).
If there are no Reps that have been there more than five years, then that's red flag #1.
See if you can talk with Reps that have recently left - then ask them for their gripe list. One way to do that is when shown your new office, ask who was the last occupant. All you need is a name and you can probably find them via search engines in a few minutes (and you can usually always find them using Finra's website). If not, then look at the sales commission payout logs. Then track them down and take them out for dinner and drinks (and pay) and you'll hear a never-ending rant about how and why you should not join that BD.
If you don't do this, then not only will this be you soon, but you're not going to be told about any of these problems until AFTER you're on board - "Oh by the way, we're a NaviPlan only shop. You can't use anything else, so don't even bother submitting other financial tools to compliance for approval.""
We were actually told this AFTER the Branch Manager bamboozled us into joining Royal Alliance // AIG by saying, "Sure you can use your own financial tools, they look great!""
Then he didn't at all "remember" that bold-faced lie one bit when all of the disapprovals came back. So I bailed the next day, and haven't had anything to do with any BD or Finra since (and life has been much better).
The best way to test your prospective Broker Dealer, to make sure you're not going to be caught in their trap once you've signed up, is to get a Principal or Branch Manager to submit financial plan software you want to use to compliance for approval BEFORE you sign up.
In other words, while you're negotiating / interviewing, give hard copy print outs of all of the financial plan modules you want to use to the Principal or Branch Manager that's trying to get you to join.
An even better way is to just have the BD submit the actual software program to Finra for review. We'll be happy to send actual working financial plan software to Finra or a BD compliance person for this purpose.
Tell them in writing that being able to use the financial software you like, is a requirement of hooking up with their BD.
If there's no problem, then the Branch Manager will submit everything to compliance, they'll give an opinion, then you'll hear back.
If the Branch Manager doesn't want to do this (regardless of any lame excuse they give), or if compliance says no, then just don't join them. This is a BD that's just going to do everything they can to ruin your life.
If they say it has to be submitted by an actual Rep with the BD to Finra for approval, then tell the Principal or Branch Manager to do that (because guess what... they are a Rep).
If it costs money, then tell the Branch Manager you'll split this cost with them. If they don't want to spend small amounts of money on recruiting you (~$100), then this is not a good BD to join.
If you join, then you'll probably spend the rest of your life paying for that one mistake. There's hundreds of BDs out there that need fresh meat, and you're hiring them more than they're hiring you, so shop around until you find the one that works for you.
The bottom-line is that you should never join a BD until they first approve all of the financial planning software that you want to use. If they don't, then you'll be stuck using something what's not going to work for you. This is because clients won't like it, so you won't make any money like that, won't meet their minimum sales quotas, and then you'll get fired or will quit in less than a year.
Then you'll be stuck in the time consuming and expensive trap of having to switch BDs and transfer your business to the new one.
When the wars start because the old BD will try to punish you as much as possible by keeping all of the money, clients, and work you put into your practice.
First it will take months to find a new BD that's right for you. Then it will take hundreds of dollars to join them. Then it will take hundreds of hours and dollars to fight to old BD to do the paperwork to block transfer your existing clients to them. Then when these wars start, lawsuits will be filed, and this will suck thousands of hours and dollars out of you again.
Then guess what, you are not legally allowed to make one dime, even from your old clients, until ALL of this bleep is resolved!!
Then you could easily be "out of work" and starving for over a year (until they feel they've punished you enough, then get around to doing your paperwork like they should have on day one).
So one of the most critical decisions of your career is to find a good Broker Dealer the first time around. How to do that is to make them approve ALL of the financial tools you want to use BEFORE you sign anything.
Yes this sucks, but that's life in the Real World. An ounce of prevention is worth a pound of cure. And in this biz, one bad move could literally ruin your life forever. So take the time to interview your BD about financial planning software, BEFORE you sign up!
Below is a very old and incomplete list of most all Broker Dealers. We were going to keep track of which BD approved which software, but we ran into a wall of whining lawyers determined to keep all of this a secret from you (so you'll be totally defenseless and on their fresh meat hook after you sign all of their contracts).
For example, we called some and talked with compliance, and they told us, "We'll either look at and approve, or send to Finra for approval, any financial planning software one of our Reps wants to use.""
Then we put the text, "They'll try to approve most anything Reps want to use" under their BD listing below; and the lawyers made a huge fuss. One would think this free publicity of being "good BDs" would be welcomed.
The one that made the biggest fuss was one where the Fact Finders, IPS, Seminar, Fee-based agreement, Retirement Software, Model Portfolios, and Asset Allocation software were ALL approved for us a few years earlier while we were an actual 24 Rep with them - for years without any problems!!!!
It took months of tedious work going through the whole approval process with them, the SEC, and Finra. We finally worked all of the bugs out and all of these things were eventually approved. Then they all sailed through two other BD's compliance departments after that without needing to be sent to Finra (and dozens more by customers).
So we got all of these financial tools approved by them while we actually worked there as a Series 7 / 65 / 24 portfolio managers, then later we tried to give them good publicity by saying they have a fair compliance approval process. Then their lawyers whined profusely about it! If this seems unbelievable to you, then welcome to just the tip of the iceberg that is the Broker Dealer world. So all of that information was deleted from the list below.
If you want to live in BD world, then you'll be butting up against things like this day in and day out until the cows come home, and it gets much worse when the BD is in barely surviving mode, which is not getting any better over time.
So sorry we can't help you figure out which BD approves which financial plan software anymore. We tried to help, but they put a clamp on all of that, so you're going to have to do all of this due diligence yourself BEFORE you sign up.
The best advice we can give is that if anyone at a Broker Dealer tells you they ONLY approve the big code-driven software platforms, then you're not going to have the financial tools needed to do the jobs clients want to you to for them, and you're probably going to end up failing and ruining your life forever.
The only correct answer is, "We'll either look at and approve, or send to Finra for approval, any financial planning software one of our Reps wants to use.""
Then get this in writing, or get whoever is trying to hire you to get an actual compliance and/or Finra approval, BEFORE you sign anything.
The best thing to do these days, is just too go independent and fee-only, and not have anything to do with any Broker Dealer or Finra at all.
If you're any good at what you do, you'll learn this the hard way in a year or so anyway, as it's the natural evolution in this business. The financial planning eBook will explain all of this in much more detail.
Miscellaneous but Relevant Text from Other Pages
Just like AIG used to only approve of NaviPlan before they went both under again - great business model, huh? AIG went under during the meltdown requiring a $182 Billion tax-payer bailout, then EISI went under and had to be sold to Advicent, so both Financial Profiles and NaviPlan are owned by Advicent (which is owned by a Midwest life insurance company)).
This should have been a wake-up call for doing biz this way, but instead, most BDs just Replaced their default NaviPlan software with MoneyWhatever, and then carried on with business as usual.
Since the newbie Rep is more than overwhelmed with being a newbie Rep, there's no time or attention span to do any actual research. Since this is their first rodeo, they don't even know where to start.
So they just default to what their BD wants them to do, and another MoneyWhatever sale is made. Isn't life way easier using the good-ol-boy you scratch my back and I'll scratch yours (AKA kickbacks) cartel / cabal quasi-monopoly way of doing business??
Here's how to tell if a financial software vendor is "Broker Dealer software" or not: If the vendor's website has little-to-no information about their software, then it's BD software. Why? Because when you're "paying the BDs kickback money" or are "stuck in a partnership," this creates a captive market. (quasi-monopoly).
So if you ask your BD which software to use, they're just going to say, MoneyWhatever or Profiles or NaviPlan, etc.
They didn't do an evaluation, they're just defaulting to this choice because it's what everyone else does. When everyone else does something, then it's just easier to go along with the herd. What's hard, and consumes non-existent resources, is actually doing research and getting to the bottom of how things actually work. BDs don't have the resources to do that anymore.
So BD software vendors won't have any useful information on their websites other than some scant marketing fluff, contact info, then here's our software download the demo or buy now. That's it, little-to-no useful information.
This is because they don't have to provide any information to entice users to buy it. Take a look at the MGP or the NaviPlan websites - there's little-to-nothing there because it's not needed.
Users (Reps) are "forced" into buying it just because of these BD "partnerships." So when you have the market locked up, there's no need to advertise on the Internet or care about how web searchers view your deals when seeking information. You're making more than enough money as it is, so why do all of that hard work? It's more trouble than it's worth, so they don't.
So if a vendor is not part of this "BD approved cartel / cabal," then they have to write a lot about their products to provide enough information to both get ranked highly by search engines, and get this non-captive market to make a more intelligent buying decision.
So if a vendor, like us, has tons of information about financial planning software, then it's because they don't enjoy being part of this good 'ol boy cartel / cabal.
The way the world still works is mostly a lose-lose proposition for everyone involved. Nobody wins but the software vendors in the cartel / cabal, and the product packagers & marketers (life insurance companies and ETFs and American Funds) - not the Rep, the BD, and definitely not the clients.
If this was not true, then commission-based Reps, BDs, and investors would all be thriving. Instead it's just been one long implosion, crash, going under, and/or barely surviving for both the BD business model, their Reps, and the big life insurance companies too. Clients of BD Reps aren't doing much better in the 211stcentury either.
What's the driving force behind all of this (all the way down to the "semi-fake financial planning software approval process cartel / cabal")?
The big life insurance companies that own and control big BDs. As long as their profits keep coming in from their armies of BD Reps' insurance and annuity sales, then all of this is just fine, and nothing needs to be changed.
They couldn't care less if they're the only winners in this deal and everyone else loses. All they need to do is keep feeding the politicians the big bucks, and nothing will ever change and everything will be awesome (because if they fail, which they did.
In case you didn't know, the government still didn't even come close to dealing with "too big to fail." So all of this is just poised to repeat itself again and again.
Below is an incomplete list made around 2005. So some of the BDs probably went under, and a whole new crop probably needs to be added someday. It still has a little value, so it wasn't deleted because of the lawyer problems mentioned above. It's just not going to be updated anymore.
|Financial Planning Software Modules For Sale
(are listed below)
Our Unique Financial Services
Miscellaneous Pages of Interest
|BD Name||Location||Website URL||Phone|
|AIG Advisors (Royal Alliance Associates, SunAmerica, American General Securities, Sentra Securities, Spelman and Co.)||LA, CA||sunamerica.com||(800) 445-7862|
|American Portfolios Financial Services||Holbrook, NY||americanportfolios.com||(800) 889-3914|
|Ameritas Investment Corp.||Lincoln, NE||aicinvest.com||(800) 445-7862|
|Associated Securities||LA, CA||associatedsecurities.com||(310) 670-0800|
|AXA Advisors (MONY life insurance)||NYNY||axaonline.com||(212) 554-1234|
|Berthel Fisher and Company Financial Services||Cedar Rapids, IA||berthel.com||(800) 354-5234|
|Brecek and Young Advisors||Folsom, CA||brecek.com||(888) 7771992|
|Broker Dealer Financial Services (Bankers Financial Services Corporation, BFS)||Des Moines, IA||bdfs.com||(800) 352-5634|
|Cadaret, Grant and Co.||Syracuse, NY||cadaretgrant.com||(800) 288-8601|
|Capital Analysts||Radnor, PA||(610) 995-1500|
|Centaurus Financial||Orange, CA||centaurusfinancial.com||(800) 880-4234|
|Century Securities Associates||St. Louis, MO||centurysecurities.com||(800) 488-7994|
|Choice Investments||Boston, MA||choiceami.com||(800) 735-3756|
|Commonwealth Financial Network||Waltham, MA||commonwealth.com||(800) 251-0080|
|Crown Capital Securities||Orange, CA||crowncapitalsecurities.com||(800) 803-8886|
|Ensemble Financial Services||Pittsford, NY||ensemblefs.com||(585) 419-1010|
|Equitas America||Farmington Hills, MI||equitasusa.com||(800) 719-9160|
|Equity Services||Montpelier, VT||equity-services.com||(800) 344-7437|
|Financial Network Investment Corp.||El Segundo, CA||financialnetwork.com||(800) 879-8100|
|First Allied Securities||San Diego, CA||firstallied.com||(619) 702-9600|
|First Command Financial Planning||Fort Worth, TX||firstcommand.com||(800) 443-2104|
|First Midwest Securities||Bloomington, IL||firstmidwestsecurities.com||(800) 662-8452|
|Fortune Financial Service||Ohio||www.ffsreps.com||(330) 666-6360|
|Great American Advisors||Cincinnati, OH||(800) 216-3354|
|Harbour Investments||Madison, WI||harbourinv.com||(608) 274-7744|
|HD Vest Financial Services (Wells Fargo and Co)||Irving, TX||hdvest.commain.html||(972) 870-6000|
|Independent Financial Group||San Diego, CA||ifgsd.com||(800) 269-1903|
|ING Financial Partners||Des Moines, IA||ingfinancialpartners.com||(800) 356-2906|
|InterSecurities||St. Pete, FL||intersecuritites.com||(727) 299-1800|
|Investacorp||Miami Lakes, FL||investacorp.com||(800) 804-0000|
|Intervest International Equities||Colorado Springs, CO||intervestintl.com||(719) 592-9299|
|Invest Financial Corp.||Tampa, FL||investfinancial.com||(800) 245-4732|
|Investment Centers of America||Bismarck, ND||investmentcenters.com||(701) 250-3300|
|Investors Capital Corp.||Lynnfield, MA||investorscapital.com||(800) 949-1422|
|Kovack Securities||Fort Lauderdale, FL||kovacksecurities.com||(866) 564-6574|
|LaSalle Street Securities||Elmhurst, IL||lasalle-st.com||(630) 600-0500|
|Lincoln Financial Advisors||Fort Wayne, IN||lfa-sagemark.com||(800) 237-3813|
|Lincoln Investment Planning||Wyncote, PN||lincolninvestment.com||(800) 242-1421|
|Linsco/Private Ledger (LPL Holdings)||San Diego||joinlpl.com||(858) 450-9606|
|M Holdings Securities (M Financial Group)||Portland, OR||mfin.com||(503) 232-6960|
|Medallion Investment Services||Severna Park, MD||medalliongroup.net/||410-544-8400|
|MML Investor Services (Mass Mutual Life Insurance)||Springfield, MA||massmutual.comMMLISI/Index.html||(800) 542-6767|
|Multi-Financial Securities Corp.||Denver, CO||multifinancial.com||(800) 929-3485|
|Mutual Service Corp.||West Palm Beach, FL||mutualservice.com||(561) 835-4100|
|National Planning Corp.||Santa Monica, CA||natplan.com||(800) 881-7174|
|Next Financial Group||Houston, TX||nextfinancial.com||(713) 789-7122|
|NFP Securities||Austin, TX?||nfp.com||(212) 301-4000|
|National Planning Corp.||Santa Monica, CA||natplan.com||(888) 711-6720|
|Northwestern Mutual Investment Services (Life Insurance)||Milwaukee, WI||nmfn.com||(414) 271-1444|
|NY Life Securities||New York, NY||newyorklife.com||(212) 576-7000|
|ONESCO (The O.N. Equity Sales Co. or Ohio National Equity Sales Company)||Cincinnati, OH||onesco1.com||(513) 794-6794|
|Pacific West Securities||Renton, WA||pwfinancial.com||(425) 271-3550|
|Park Avenue Securities||New York, NY||pasdirectplus.com||(888) 600-4666|
|Pension Planners Securities||Sacramento, CA||askpensionplanners.com||(800) 722-2999|
|Princor Financial Services||Des Moines, IA||princor.com||(888) 774-6267|
|ProEquities||Birmingham, AL||proequities.com||(800) 288-3035|
|Questar Capital||Ann Arbor, MI||questarcapital.com||(734) 213-6000|
|Raymond James Financial Services||St. Pete, FL||advisorchoice.com||(800) 998-7537|
|Royal Alliance Associates (AIG)||NYNY||royalalliance.com||(800) 821-5100|
|Sammons Securities||Ann Arbor, MI||sammonssecurities.com||(866) 520-6869|
|Securia Financial Services||St. Paul, MN||securianfinancial.com||(888) 237-1838|
|Securities America||Omaha, NE||securitiesamerica.com||(800) 989-8441|
|Securities Service Network||Knoxville, TN||ssnetwork.com||(865) 777-4677|
|SII Investments||Appleton, WI||siionline.com||(800) 426-5975|
|Summit Brokerage Services||Boca Raton, FL||summitbrokerage.com||>(561) 338-8200|
|The Investment Center||Bridgewater, NJ||investmentctr.com||(800) 345-8041|
|Transamerica Financial Advisors||LA, CA||tfa.transamerica.com||(800) 245-8250|
|Triad Advisors||Atlanta, GA||triad-advisors.com||(800) 720-4003|
|United Planners Financial Services||Scottsdale, AZ||unitedplanners.com||(480) 991-0225|
|USAllianz Securities||Minneapolis, MN||usallianzsecurities.com||(888) 446-5872|
|Wachovia Securities Financial Network||Richmond, VA||wachovia.com||(877) 289-3614|
|Walnut Street Securities||St. Louis, MO||walnutstreet.com||(877) 925-6881|
|Waterstone Financial Group||Itasca, IL||waterstonefinancialgroup.com||(630) 250-7000|
|WRP Investments||Liberty Township, OH||wrpinvestments.com||(800) 589-2023|
|Woodbury Financial Services||Woodbury, MN||woodburyfinancialservices.com||(800) 800-2000|
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