Insurgent candidate vies for large-firm seat on Finra board

Chris Flint says he can bring unique perspective of firms offering financial advice, products

Jul 26, 2019 @ 12:44 pm

By Mark Schoeff Jr.

An insurgent candidate for the Finra board of governors said the body needs more input from large firms that provide financial advice and investment products.

Chris W. Flint, president and chief executive of ProEquities Inc., has been nominated by petition to compete for a large-firm seat on the Financial Industry Regulatory Authority Inc.'s board currently held by Andrew S. Duff, former chairman and chief executive of Piper Jaffray Companies. Mr. Duff was selected to run by the Finra board's nominating committee.

The Finra election, which will conclude on Aug. 19, also features a contested race for a small-firm seat. The approximately 3,700 Finra member firms can vote by telephone, postal mail or online. The Finra board consists of 24 members, 10 of whom are from the industry and 13 of whom are public. Finra chief executive Robert W. Cook also sits on the board.

Mr. Flint, who also is senior vice president for distribution companies for Protective Life Insurance Co., said he can best represent the Finra large-firm members who concentrate on delivering financial advice and products as opposed to operating in other parts of the capital markets.

A former president of Lincoln Financial Securities and senior vice president of Lincoln Financial Group, Mr. Flint said he can speak for independent broker-dealers, bank-owned retail platforms and insurers that manufacture investment products sold by brokers.

"I bring a diversity and perspective that doesn't exist with the board today or with the incumbent," he said. "When I talk to my peer firms, they don't feel they're represented on that board. They came to me and said, 'We need a voice.'"

The Financial Services Institute, which represents independent broker-dealers and financial advisers, and the Bank Insurance Securities Association, a trade group for bank-based financial advisers, have both endorsed Mr. Flint.

Mr. Duff, who is currently on the board of Piper Jaffray & Co., the primary broker-dealer subsidiary for Piper Jaffray Companies, acknowledges the firm transitioned to a fully institutional focus more than a decade ago. But he points out it served retail investors for most of its 120-year history.

In addition, he said the other two large-firm Finra board representatives — Timothy C. Scheve, president and CEO of Janney Montgomery Scott, and Jim Nagengast, chief executive of Securities America Financial Corp. Inc.— run firms with a retail orientation.

"All three of us have experience with private clients," Mr. Duff said. "I'm familiar with all these issues."

Mr. Duff has been endorsed by the Securities Industry and Financial Markets Association and by the American Securities Association.

In his campaign, Mr. Duff is taking advantage of being the incumbent by stressing he understands how rulemaking and enforcement work, and that he has played a role in Finra 360, the organizational self-review designed to reform Finra's operations.

"We have made very good progress on more transparency," Mr. Duff said. "We've got some very significant and effective changes underway. I've been involved in the decisions and am an advocate for what they can accomplish."


A primary objective of Finra 360 is to improve how the regulator oversees small firms. One of the candidates for the small-firm board seat, Linde Murphy, chief compliance officer at M.E. Allison & Co. Inc., said she has seen "great strides, especially from senior-level [Finra] management."

But she's concerned the evolving approach to regulation of small firms has not progressed beyond the Finra executive suite.

"What we haven't seen is a trickle-down to frontline Finra employees," Ms. Murphy said. "The challenge is to have [the Finra 360 ethos] go all the way to the frontline staff. They don't understand small businesses. Finra in general has never sat where we sit as small-firm leaders, handling every aspect of the business."

Ms. Murphy was nominated by petition to run against incumbent small-firm seat board member Robert A. Muh, chief executive of Sutter Securities. Mr. Muh, who was nominated by the board nominating committee, could not immediately be reached for comment.

During her campaign, Ms. Murphy is emphasizing the importance of ensuring small firms — who make up the vast majority of Finra membership — prosper.

"We do make a difference in our national economy," Ms. Murphy said. "We need to help small firms survive and thrive."


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