Monday, February 20, 2006
First Command tries a flanking maneuver
Still smarting from the destruction of their business model and a $12 million fine from the National Association of Securities Dealers, First Command is anxious to begin rebuilding the credibility of their tattered brand.
And the irony is rich, indeed - because Paul Cozby, the Public Relations Director of this living, breathing example of how NOT to do business with the American serviceman has just gotten himself a seat on the Board of Directors on Fort Worth's Better Business Bureau.
I'm sure the BBB can be relied on to help resolve consumer complaints in the financial services industry. NOT! First Command couldn't even seriously discipline the Charleston advisor whose outrageous sales practices were specifically singled out by the NASD. The NASD suspended him for a time, but when I called the Charleston office last spring, he was back at work, dealing with the same military families whose trust the NASD found he had abused.
And Chron.com, the Website portal of the Houston Chronicle, doesn't even mention the controversy surrounding the company. Actually, they quite literally run an unedited corporate press release. Way to serve and inform your readers, Chron!
Splash, out
Jason
UPDATE: The Fort Worth Star Telegram details the changes that First Command has been making over the last year or so. If the report is accurate, I must say the changes are meaningful and I'm actually pleased.
The transition from Broker-Dealer status to Registered Investment Advisor is huge, and will require a major paradigm shift in the field, because - as the article points out, an RIA has a FIDUCIARY duty - the highest standard of care toward the client recognized by law - to act solely in the best interests of the client.
Obviously, a lot of salespeople hit the road. Good riddance to them. We don't need their ilk serving the military community. But it looks like there are some positive changes being made over at First Command. It's a bit late. And I don't think the bloodletting has gone deep enough. But what changes they do make for the better should be recognized and encouraged.
On the downside, they are still a commission-only organization. The conflict-of-interest in such a relationship is inherent, and very difficult to surmount - especially when they still have their old sales force mostly in place. They say they will be moving to a fee-only or fee-based system. I hope so. I'll believe that when I see it.
I'm predicting fellative coverage from Military Times any minute.
Splash, out
Jason
And the irony is rich, indeed - because Paul Cozby, the Public Relations Director of this living, breathing example of how NOT to do business with the American serviceman has just gotten himself a seat on the Board of Directors on Fort Worth's Better Business Bureau.
I'm sure the BBB can be relied on to help resolve consumer complaints in the financial services industry. NOT! First Command couldn't even seriously discipline the Charleston advisor whose outrageous sales practices were specifically singled out by the NASD. The NASD suspended him for a time, but when I called the Charleston office last spring, he was back at work, dealing with the same military families whose trust the NASD found he had abused.
And Chron.com, the Website portal of the Houston Chronicle, doesn't even mention the controversy surrounding the company. Actually, they quite literally run an unedited corporate press release. Way to serve and inform your readers, Chron!
Splash, out
Jason
UPDATE: The Fort Worth Star Telegram details the changes that First Command has been making over the last year or so. If the report is accurate, I must say the changes are meaningful and I'm actually pleased.
The transition from Broker-Dealer status to Registered Investment Advisor is huge, and will require a major paradigm shift in the field, because - as the article points out, an RIA has a FIDUCIARY duty - the highest standard of care toward the client recognized by law - to act solely in the best interests of the client.
Obviously, a lot of salespeople hit the road. Good riddance to them. We don't need their ilk serving the military community. But it looks like there are some positive changes being made over at First Command. It's a bit late. And I don't think the bloodletting has gone deep enough. But what changes they do make for the better should be recognized and encouraged.
On the downside, they are still a commission-only organization. The conflict-of-interest in such a relationship is inherent, and very difficult to surmount - especially when they still have their old sales force mostly in place. They say they will be moving to a fee-only or fee-based system. I hope so. I'll believe that when I see it.
I'm predicting fellative coverage from Military Times any minute.
Splash, out
Jason
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