Ameriprise unit loses top rep to First Allied

Compliance changes may be behind departure, say some

Dec 10, 2007 @ 12:01 am

By Bruce Kelly

As Securities America Inc. deals with the sting of losing one of its biggest advisers, the independent broker-dealer continues to tighten its compliance practices and procedures.

Raymond J. Lucia Cos. Inc. of San Diego last month left Omaha, Neb.-based Securities America, one of the firm's largest affiliates, to join First Allied Securities Inc.

Six industry recruiters and executives offered mixed views as to whether the compliance efforts of Ameriprise Financial Inc. of Minneapolis, the parent firm of Securities America, have caused reps and advisers to leave, or consider leaving, the firm.

Several recruiters also noted that throughout the industry, adviser mobility is becoming more difficult, particularly as securities regulators focus on the way firms handle privacy issues and clients' personal information.

Compliance at Securities America "mirrors" that at Ameriprise, said one industry recruiter, who asked not to be identified. The firm has become "more heavy-handed with annuities and 1035 exchanges. There's more paperwork," the recruiter said.

"A firm goes from being rep driven to compliance driven, and that makes it a tough environment for the rep," the recruiter said.

Meanwhile, Securities America must deal with losing Raymond J. Lucia, CEO of his eponymous company. An industry source pegged his company's production at $15 million, while records at the Securities and Ex-change Commission indicate that its advisory business has $264 million in assets and 2,049 client accounts.

The Lucia website says the firm's 14 advisers serve 5,000 investors through nine offices in Arizona, California, Nevada, New York, Oregon, Texas and Washington.Mr. Lucia also is the host of a national radio show, has written two books and is a friend of humorist and economic pundit Ben Stein.

Mr. Lucia didn't return telephone calls seeking comment about his move to San Diego-based First Allied.

Steven McWhorter, Securities America's chief executive, also wasn't available to comment last week.

"Mr. Lucia wanted to work with a broker-dealer closer to his home base of operations," Chris Reese, a spokesman for Ameriprise, said when asked about last month's departure. "We wish him well."

Separately, Mr. Reese said that Securities America has significantly in-creased its compliance practices and procedures.

Around this time last year, the company lost its second multimillion- dollar arbitration claim with NASD of Washington involving rogue brokers. In total, the two cases cost the firm $31.3 million in fines and restitution.

This year, Securities America rolled out a new compliance initiative to its 1,784 affiliated reps and advisers.

Some executives and industry recruiters with rival firms wonder whether the program, oddly dubbed Operation Sparrow, has tightened compliance for reps and advisers to such a degree that it has alienated them in the process.

They also note that the new program appears to signal greater involvement on the part of Ameri-prise, which has long maintained that it doesn't participate in the operation of its subsidiary.

"We are working with Securities America to enhance compliance," Mr. Reese said.

"We believe our advisers, clients and company benefit from having a strong compliance culture," he said.

One Securities America rep praised the new program. "It brings a heightened awareness to monitor things a little tighter," said Rich Carlton, an adviser in Eugene, Ore.

It appears that Ameriprise, formerly American Express Financial Advisors Inc., was "looking to work more closely with Securities America in technology," he said.

Combining Securities America and its two other brokerage and advisory platforms, Ameriprise serves 12,000 advisers, making it one of the nation's largest retail-securities companies.

Bruce Kelly can be reached at


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