At 11: 56am Pacific time on January 2, a tweet appeared from Ross Gerber of Gerber Kawasaki:
My news: 'I’ve resigned my affiliation with LPL Financial and am no longer a registered rep. I am now a fee only SEC registered RIA. I’ve made this decision for many reasons but ultimately to be able to continue to grow my career away from unnecessary excess regulation.'
'As an RIA I have more latitude,' said Gerber. 'When I was first with LPL, I sold products but now I'm 90% advisory. I'm not selling products, so why should I be regulated in the sales process?'
Gerber still wanted to work with LPL though, saying, 'We have a great relationship.' So the solution they came up with was for Gerber himself to no longer be a registered rep, but to still trade through LPL, still use the firm as custodian. Others at his firm GerberKawasaki will remain registered reps.
Gerber said he will look at other custodians as well, and different technologies too for his firm, which is seven and a half years old and has $685 million in assets under management, across 18,000 accounts.
'When you're with LPL you're stuck with LPL,' he said. 'But there's a lot of interesting technologies and apps out there.'
The real issue, though, said Gerber, was Finra, with regard to social media and his media appearances.
'They're so negligent in doing fair service to advisors regulated by them on social media and technology,' he said. 'They can't even put out a coherent policy on what you can talk about. If I post something on Facebook and 25 people see it, is it sales literature?'
LPL, he said, tries to 'play a conservative game of not getting into trouble with Finra, which I suppose they should, but, they're just a victim of Finra's lack of understanding of social media. My clients can't even text message me. They DM me. What am I gonna do? Not answer?'
Gerber said he was audited by the SEC last year, which he called 'a wonderful experience, very illuminating.'
He said: 'I asked the SEC if they cared about the use of social media. They said as long as you're disclosing it that's all you have to do.'
He referred to Finra as 'regulatory gone amok.'
Finra decline to comment.
Gerber said his firm has been called progressive, as it has become involved with cryptocurrencies and marijuana stocks.
'Thirteen million people are in cryptocurrencies,' he said. 'The average Joe is opening coin-based accounts. They should be doing IRAs. They need a financial advisor. I want to be able to advise clients on that.'