Seems the referee threw a flag.

Between January 2018 and December 2021, SW Financial, based in Melville, New York, and the co owner of the firm, Thomas Diamante, made material misrepresentations, neglecting to include material information linked with the sale of private placements offerings of pre-IPO securities, according to thinkadvisor.com. It was a duo violation; of FINRA rules and Reg Bi’s Disclosure Obligation as well.

According to Reg Bi’s Disclosure Obligation, it’s incumbent upon broker dealers – as well as those associated – to provide investor clients, “with full and fair written disclosure, prior to or at the time of a recommendation, of all material facts relating to conflicts of interest associated with the recommendation,” as spelled out by FINRA.   

Although it’s FINRA’s maiden expulsion, it’s not its first enforcement action evolving around Reg Bi, which has been around since 2020, according to the National Review.

By year’s end, FINRA pronounced, compliance examinations of 1,000 broker-dealers would be conducted.

Loose lips can, um, wreak havoc on ships.

In your branch, most advisors shouldn’t know squat about your plans; after all, they’re not buddies of yours, but competitors, according to thinkadvisor.com.

If you’re cutting the cord and bidding a non protocol firm adieu, it’s important for you to buckle down and closely abide by the prospective firm’s instructions.

In the world of missteps, a gaggle them can add significant difficulty to your transition:

Failing to Play by the Rules

Being Clueless About the Transfer Process

Taking Your Eye Off the Ball

Not Staying in Front of Clients Prior to Your Move

Meantime, you know the money? Well, follow it.

Probably not a badly conceived plan considering the consolidation on the part of Phoenix based Advisor’s Group of its network of eight brokerages into one translates into challenges, according to financialplanning.com. Those obstacles stem from the flow of thousands of financial advisors and assets work billions of dollars.

With more than 10,500 financial advisors and $490 billion in client assets, the firm will shift them to a rebranded company with a spanking new moniker, according to a report earlier this month by Moody's Investors Service.

Your table’s ready, direct indexing. The food’s hot, the beverages refreshing cold.

What else would you expect, considering that in the financial industry, direct indexing’s all that and more – as in the next big thing, according to comparebrokers.co.

Who’s it idyllic for? Those who are calling it a day in the workforce. Under those circumstances, they can unload holdings that impact taxes the least.

If you want to separate yourself from your peers, direct indexing strategies could be your answer, according to advisorperspectives.com.

They can dispense tax effective ways to manage any cash windfalls that might be on the horizon among high net worth investors. Not only that, they can shore concentrated stock positions.

In a recent interview at IMPACT, Daniel Needham, president of Morningstar Wealth Management Solutions, said his firm considered direct indexing an “important investment option for advisors to be able to deliver great advice to their clients.

“That’s the primary reason we decided to enter the market,” said Needham. “We think that direct indexing is a good way for clients to be able to have their financial capital personalized, including their values, beliefs and preferences, as well as to be tax-managed for a lot of households. Tax management should happen for every household.”

Someone say doomsday scenario?

Or at least strongly imply it?

Democrat; Republican -- you can just shunt the ideologies aside. Both have a separate point of view with no end in sight in order to circumvent default as the government edges toward its so-called debt ceiling x-date, according to cnn.com. That, of course, is when the Treasury could find its pockets empty, meaning paying all government obligations would require extraordinary measures.

Okay, so while the odds still are relatively low that the government will default on its debt, Wall Street’s no fan of the impact the equity markets would feel in light of debates flashing no indications that the credits are anywhere near rolling.

Meantime, investors should devote rapt attention over the next few weeks and, as one expert suggests, stand poised to become “a bit more defensive,” according to cnbc.com.

At this point, at least, setting aside the fact the short term Treasurys have priced in reluctance, significant volatility isn’t necessarily in the cards as far as the markets are concerned.

“Congress was willing to play the game of chicken, but there were fewer members of Congress actually willing to crash the car,” said Betsey Stevenson, professor of public policy and economics at the University of Michigan.

Ethan Roberts covers the weakness in office REITs over the past couple years in a Benzinga article and whether there is any opportunity to buy the dip. To recap, the sector’s struggles began due to the pandemic with remote work gaining in popularity, leading many companies to downsize or abandon their offices.

Not surprisingly, office REITs were crushed and their struggles were exacerbated by high interest rates. Many of these REITs dropped more than 50% and are trading below their March 2020 levels, despite the broader market being substantially higher. 

However, some contrarians are turning more optimistic on the sector. They believe that valuations have become very compelling especially given that public market valuations are much cheaper than private markets. Additionally, there are increasing signs that corporations are pushing back against remote work culture by insisting that workers must go to the office at least a couple of times per week. 

In addition to this, real-time metrics like metro ridership and miles driven also seem to confirm that more workers are returning to the office. Finally, with increasing cracks in the labor market and expectations that the unemployment rate will increase over the next year, workers have less leverage and may be forced to return to the office. 

Finsum: Office REITs have been crushed over the past couple of years due to the pandemic and high rates. Now, there are some reasons for optimism.

Compared to the first quarter of 2022, recruitment of financial advisors in Q1 2023 is down 16%. This shouldn’t be too surprising given the recent turmoil in the banking sector, concerns that the economy could tip over into a recession, and much of corporate America in belt-tightening mode. Devin McGinley in a piece for InvestmentNews dug into what the rest of the year should bring and highlighted some notable under the radar trends. 

It will be interesting to see the fallout from the regional banking crisis as it may compel some advisors to leave. For instance, many First Republic advisors have already or are expected to leave the firm following JPMorgan's takeover of the beleaguered bank. 

One bright spot has been growth in the RIA and independent broker-dealer space. In the first quarter, 261 advisors joined RIAs, while broker-dealers added 234 advisors which indicates that both are growing at a similar pace to last year. 

Clearly, the data shows that overall recruitment of financial advisors has slowed. While there could be a burst of activity with advisors leaving regional banks, the bigger story is the continued growth of RIAs and broker-dealers.

Finsum: The recruitment environment for financial advisors has changed in 2023, but there is no change in the pace of growth for RIAs and broker-dealers.

Elizabeth O’Brien covered the optimism among bond investors that a change in Fed policy could result in a major rally for the asset class in a Barron’s article. Current fed futures odds show that the market sees a more than 90% chance of the Fed pausing at its next meeting. And given recent inflation and economic data, it’s likely that the Fed has seen sufficient progress to shift its focus to financial stability over combating inflation.

Therefore, it could be an opportune moment to invest in high-quality bonds with longer maturities. These bonds are yielding about 5% which is nearly double what they averaged during the past decade. 

While some believe that the economy is weakening enough to compel the Fed to cut rates by the end of the year, others believe this is a more typical cycle and that the Fed will likely be on hold for an extended period of time. 

Since 1990, the average pause between hiking and cutting cycles has been 10 months. The typical behavior is that fixed income rallied in anticipation of cuts but volatility picks up until the cuts actually begin, leading to a healthy tailwind for the sector. 

Finsum: A major catalyst could be emerging for fixed income given that the market expects the Fed to pivot at its next FOMC meeting in June.

In an article for GoBankingRates, Andrew Lisa shared some thoughts on the best way to onboard new clients. The first thing is to understand that a financial advisor needs to be an independent and trusted professional for the client, similar to a doctor or lawyer. 

While each individual client has unique personalities and circumstances, there are still some universal principles and guidelines that you can introduce to your clients. This will help communicate your philosophy and value proposition, while creating momentum towards your clients’ goals from Day 1. 

One suggestion is to start with understanding their cash flow. This means understanding every dollar that is coming in and going out. For every financial goal, this is the starting point. Additionally, you can get your clients started on tracking income and expenses to get a better understanding of cash flow. 

Related to this, the next step would be to establish clear goals for the short-term and long-term. The nature of goals could differ based on a clients’ circumstances and age. Finally to increase the odds of success, the plan needs to be put into writing. This increases the chances that the plan is followed and daily decisions are aligned with long-term goals. 

Finsum: Every client is unique, but there are still some common onboarding steps that advisors can take to introduce them to your practice and philosophy. 

In an article for AdvisorPerspectives, Jack Van Dyke of Russell Investments shared some strategies for advisors to attract high net worth investors with direct indexing. 

For most advisors, most strategies or tactics to grow their practice revolve around generating additional revenue from existing clients or adding new high net worth clients. And, the key to accomplishing these goals is to have a unique and differentiated offering. 

Direct indexing fits the bill as it can help reduce a clients’ tax bill, retain the benefits of indexing, and allow for effective customization. While most advisors are aware of this innovation, they have not yet begun offering it to clients. 

Therefore, it’s essential to start the conversation with your prospects and clients. Van Dyke recommends that advisors begin by asking questions to determine whether direct indexing is a good fit for them. These include whether or not they are expecting a large windfall in the future, their current tax liabilities from investments, and whether they have a concentrated stock position. 

These questions are effective conversation starters that you can transition into a discussion about why direct indexing can help them reach their financial goals while giving them more control over their financial destiny.

Finsum: The key to a financial advisory practice is to grow their business and/or increase revenue per client. Direct indexing is one way that advisors can achieve these goals.

In an article for AdvisorHub, Karmen Alexander covered comments from Stifel Financial’s recent conference call when CEO Ronald Kruszewski remarked that there was an opportunity to recruit financial advisors especially following the exit of ‘high payers’. 

While Kruszewski didn’t single out any firms by name, it’s likely that he was referring to First Republic which was a victim of the regional banking crisis and was taken over by JPMorgan with an FDIC backstop. The bank was notable for being an aggressive recruiter of financial advisors with large bonuses and attractive packages. At the start of the year, First Republic was reportedly offering as much as 400% of revenue generated in the past year to advisors with over $10 million in revenue. 

Unlike First Republic which targeted brokers with over $2 million in revenue, Stifel tends to target smaller brokers. Additionally, Stifel has been much more conservative in the terms that it offers. Overall, the bank hired 49 advisors. Of these, 20 were experienced brokers who were lured from other firms. 

Yet, the company also affirmed that while it sees the landscape becoming less competitive with First Republic’s exit, it will continue sticking to its discipline in terms of not offering excessively lavish packages.