White House Sides With Sales Reps On Overtime
Dr. David Edward Marcinko MBA CMP™
[ME-P Editor-in-Chief]
www.CertifiedMedicalPlanner.org
As the US Supreme Court is preparing to review the contentious debate about overtime pay for sales reps, the US Solicitor General has filed an amicus curaie, or friend of the court brief, and sided with pharma reps. The move is not surprising, given that the US Department of Labor has, several times, taken a similar step in federal courts around the country where cases were heard.
Far Reaching Implications?
The review is expected to have far-reaching implications for the pharmaceutical industry, and I believe the financial services industry, as well. Why?
Both sectors have been fighting a growing number of cases nationwide over the past several years, but has had mixed results as the issue has continually divided the courts. At the same time, drug makers, Wall Street and broker-dealers have been laying off thousands of sales reps – “financial advisors”, “wealth managers” and stock brokers – as they try to cut costs and alter their business models to prepare for some level of fiduciary accountability.
The Issue
At issue is whether drug reps, and FAs by extension, are exempt from overtime provisions of the Fair Labor Standards Act. The FLSA overtime compensation requirement does not apply to employees who work as outside salespeople, but the law does require employers to pay overtime for hours worked beyond 40 hours a week, unless a FLSA exemption applies.
My Issue
And so, does this mean that most “financial advisors” are really stock-brokers and product pushers after all? At least in medicine, we doctors know what a pharmaceutical rep is – and we understand his/ her roll is to push pharma products, DME and drug sales.
Shouldn’t a salesman – be a salesman – and an “advisor” – be an RIA or RIA rep? I don’t often agree with the White House, but I do on this one.
FAs can’t be independent client advocates – and employees – at the same time
Now, isn’t it time for the public to know that the vast majority of FAs are just salesmen [still SBs], too? Just selling retail financial products to doctors and others; not drugs. After all, FAs can’t be independent client advocates – and employees – at the same time. And, it appears with this potential filing and ruling; that they truly wish to be the later. Now FAs, admit it!
Assessment
Why do you think FAs are licensed as “registered representatives”? Rarely; a fiduciary among them!
Conclusion
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OUR OTHER PRINT BOOKS AND RELATED INFORMATION SOURCES:
- PRACTICES: www.BusinessofMedicalPractice.com
- HOSPITALS: http://www.crcpress.com/product/isbn/9781466558731
- CLINICS: http://www.crcpress.com/product/isbn/9781439879900
- ADVISORS: www.CertifiedMedicalPlanner.org
- FINANCE: Financial Planning for Physicians and Advisors
- INSURANCE: Risk Management and Insurance Strategies for Physicians and Advisors
- Dictionary of Health Economics and Finance
- Dictionary of Health Information Technology and Security
- Dictionary of Health Insurance and Managed Care
Filed under: Career Development, CMP Program, Drugs and Pharma, Ethics | Tagged: Are Financial Advisors Professionals or Employee Sales Representatives?, CFP, CMP, Dr. David Marcinko, fiduciary, financial advisors, RIA, stock-brokers, wealth managers, www.certifiedmedicalplanner.com |
So – You Want to be a Financial Advisor?
According to writer Daniel Bukszpan, adults over 50 have levels of experience and reliability their younger counterparts don’t. Both of these are factors that people look for when seeking financial advice, which makes a job as a financial advisor ideal for them.
“Youth is a liability for financial salespeople as it is in most business milieux, because clients have less confidence in young people,” says Seth Rabinowitz, lead consultant for the management consulting firmSilicon Associates. “Older people generally are less apt to take risks and to recommend risky strategies.”
http://money.msn.com/baby-boomers/10-new-careers-after-age-50
So, forget about real knowledge. No experience needed; really! Just be old.
Clairmont
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Goldman Should Stop Saying Clients Come First
Former SEC Chairman Arthur Levitt says Goldman Sachs Group Inc. should stop promoting itself as “putting customers first” because the slogan ignores conflicts inherent in trading.
Maybe they should be reading the ME-P, and brush up on the definition of “fiduciary?”
http://www.fa-mag.com/fa-news/10470-goldman-should-stop-saying-clients-come-first-levitt-says.html
Rawlings
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Advisors Often Work Against Clients’ Interests, Study Says
Financial advisors often work against the interests of their clients if it means the advisor can earn more in fees, according to a new study by the National Bureau of Economic Research.
http://www.fa-mag.com/fa-news/10580-advisors-often-work-against-clients-interests-.html
Any comments ME-P readers and subscribers?
Ann Miller RN MHA
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Ann,
Many stock-brokers [er! ah! financial advisors] increasingly feel that corporate bureaucracy operates with a mandate to push the agenda of the firm over the interests of the clients.
Any thoughts?
Montgomery
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Just a Business
Dr. Marcinko – You are so correct.
Financial services have become like any other business. Many firms believe you can’t make money servicing smaller clients with humans, just as banks want smaller clients to use ATMs and not tellers. It’s just a fact of life to these big giant financial outfits.
I sure hope this does not happen to medicine; but I fear it will.
Dr. Schaener
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Fee Disclosure – Can You Handle the Truth?
New federal rules are forcing advisors to spell out what they’re charging for running 401(k) plans and what their clients are getting for the money.
http://wealthmanagement.com/retirement-planning/fee-disclosure-can-you-handle-truth?NL=WM-07&Issue=WM-07_20120725_WM-07_110&YM_RID=marcinkoadvisors%40msn.com&YM_MID=1328126
It could lead to some difficult conversations with clients. Fiduciary, anyone?
Martin
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No Statesman
“What you’re seeing in the financial-services industry is a lack of any kind of credible statesmen”
So says Rakesh Khurana, a management professor at Harvard Business School in Boston. For example, JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon’s diminished ability to defend the industry publicly “basically leaves a vacuum,” he said.
https://www.fa-mag.com/fa-news/11996-wall-street-leaderless-in-fight-over-rules-with-dimon-diminished.html
Well, how about that?
Dr. David Edward Marcinko MBA
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House Finance Chair Goes on Ski Vacation with Wall Street
According to Justin Elliott, shortly after becoming chair of the powerful House Financial Services Committee, Rep. Jeb Hensarling held a weekend fundraiser with lobbyists in Utah’s swanky Deer Valley.
http://www.propublica.org/article/house-finance-chair-goes-on-ski-vacation-with-wall-street
Any comments?
Dirk
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The Rise Of The Employee Advisor At Financial Planning Firms
An excellent article by Mike Kitces; MTAX, CFP®, CLU, ChFC, RHU, REBC, CASL
http://www.kitces.com/blog/the-rise-of-the-employee-advisor-at-financial-planning-firms/
Kent
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Un Ethical FAs
This is how unethical financial advisers can get away with it?
http://www.msn.com/en-us/money/personalfinance/this-is-how-unethical-financial-advisers-can-get-away-with-it/ar-BBqfFP8?li=BBnbfcN&ocid=U348DHP
Dr. David E. Marcinko MBA
http://www.CertifiedMedicalPlanner.org
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