Sunday, February 24, 2013

The Tension Between Personal Responsibility and Paternalism - and the Issue of Fiduciary Standards


Throughout American society there exists a tension between two fundamental sets of beliefs. On one side is the staunch believe that freedom of contract is fundamental, that persons should take responsibility for their own actions, and if persons act stupidly (and enter "dumb bargains") then so be it.

On the other side is the belief that there are certain things so important to our society, such as the retirement security of our fellow Americans, that individuals with a great disparity in knowledge compared to the purveyors of products they deal with should possess a trusted guide, and that government should enforce this by specifying that such guides should act in a paternalistic manner (i.e., keeping best interests of the client foremost).

Both sides often ignore the fact that there is room for both. Not everyone needs nor wants a trusted advisor. Yet, those who desire a trusted advisor (which I suspect is the vast majority of Americans) want an advisor who truly stands in the shoes of the client, at all times. And they desire to be able to "judge a book by its cover" - i.e., when someone uses a title which denotes a relationship of trust and confidence, they want to be able to have confidence that such person is acting in their best interests.

Yet, due to failings in our government, the role of the trusted advisor versus the product salesperson has blurred.  Those who deal at arms-length (in which caveat emptor is the standard of protection, augmented to some degree by certain required disclosures) have moved into "trust-based selling," in essence disguising themselves as trusted advisors. Despite early warnings from the SEC and FINRA (f/k/a NASD), as evidenced by statements made in 1941 and 1963, salespeople hold themselves out as trusted advisors, yet then deny fiduciary status.

There are many economic interests who desire to continue this morass of confusion (from the standpoint of the consumer). These interests do not desire to accept the higher standard of conduct of a fiduciary. They are fearful of a profession, for with it comes professional-level compensation, a move toward hundreds if not thousands of professional practices, and a move away from the distribution systems of today with their substantial extraction of rents. In essence, the broker-dealer business model of today, an anachronism, is challenged at its very core by these developments.

Hundreds of millions of dollars have flooded into Washington, DC, in recent years, and tens of millions of dollars more each year, as Wall Street firms and insurance companies attempt to wield their influence to prevent the evolution toward a fiduciary model.

At a minimum, Wall Street and the insurance companies seek to prevent common-sense measures which would permit consumers to clearly detect the type of relationship (arms-length, or fiduciary in which they find themselves. They desire to continue their practice of "trust-based selling" - an oxymoron. Wall Street's broker-dealers, investment banks, and the insurance companies desire to perpetuate the great deception of consumers today. To paraphrase Prof. Angel and others, "To hold oneself out as a trusted financial advisor, without accepting the duties which flow from fiduciary status, amounts to fraud."

Far more devious, however, is Wall Street's greater aim -  its desire (via FINRA, aided by SIFMA and FSI and the many broker-dealer firms who are members of these organizations) to take over and kill the independent fiduciary investment advisory profession. While FINRA has recently indicated that its "SRO over RIAs" ambitions is not its key legislative priority today, there is no doubt that it continues to lay the groundwork for another run at Congress in the future.

The battle lines have been drawn. These battles exist, however, along several fronts - DOL/EBSA, SEC possible rule imposing fiduciary standards on brokers who provide personalized investment advice, the regulation and oversight of RIAs, state legislatures and state securities regulators and even in the courts (where state common law fiduciary standards are applied to relationships based upon trust and confidence).

As these battles continue, independent investment advisers and consumer groups must continue to explain the truth of the situation in which consumers find themselves today ... mass confusion, caused in significant part by deceptive marketing practices which regulators (SEC, FINRA) have refused to clamp down upon. Continued education of the SEC Commissioners, their staff, and members of Congress and their staffs is required, especially given the high degree of turnover in D.C.

While this is a challenge, it is also an opportunity. It is the opportunity to correct the misleading sales practices which deceive too many Americans. It is the opportunity to more clearly and correctly draw the line between arms-length investment and insurance product sales and trusted investment advice. It is the opportunity to restore the trust of individual Americans in the providers of investment and financial advice. And it is the opportunity to formalize a profession of true, fiduciary financial and investment advisors.

To my colleagues already engaged in this effort, continue to persevere. To my colleagues who desire to get involved, do so - but with the understanding that these battles will not quickly be won.

Our fellow Americans should be able to tell a product salesperson from a trusted advisor. For those Americans who desire an advisor to act on their behalf, these Americans deserve a profession of trusted financial and investment advisors.

Indeed, America itself deserves all of the benefits - increased savings, greater investment in the capital markets, lowered cost of capital for firms, and greater economic growth - such a development would foretell.

Keep up the good fight. Thank you.

Monday, February 18, 2013

College Educators: Do We Focus on Teaching "The Right Stuff"?

STUDENTS ... DROWSY, NOT MOTIVATED TO GET GOOD GRADES, UNABLE TO COMPLETE THEIR ASSIGNMENTS ON TIME, TOO SHY TO SPEAK UP IN CLASS. POOR STUDY SKILLS. INADEQUATE INSTRUCTION DURING HIGH SCHOOL.

Two years ago I accepted my first teaching position at an undergraduate school. I decided that I would first explore the major challenges of teaching in this environment today, and how to best deal with these challenges.

So, with several months to prepare, I reached out to clients who were active or retired professors and/or teachers, and spoke with soon-to-be colleagues, and even with my own daughters (both in college at the time). Of course, my daughters we surprised (when does a father ever seek their advice), but I actually found their comments extremely informative.

I learned that the major challenges were: (1) sleepy (and hence) inattentive students; (2) lack of adequate preparation for many students in terms of their high school education; (3) lack of motivation; and (4) lack of good communication skills, often exacerbated by shyness.

I quickly adopted a strategy. Tackle each of these challenges head-on, in the classroom environment.  How, you might ask?

First, by addressing the necessity of sleep. Academic studies show that the youth of today sleep a full two hours less per night than the youth a century ago. Dr. James Maas, author of The Power of Sleep (a must-read, for the information gained therein can even assist financial advisors in dealing with their clients), posits that the average college student requires 9 hours 15 minutes of sleep.  Other studies suggest slightly lower amounts, but still far more than the average college student gets today.

So how did I tackle this? Direct education, plain and simple. Showing a YouTube video of an excerpt from Dr. Maas' speech on the subject. As does putting the need for sleep in a catchy slogan: "9 hours, 15 minutes ... need I say more." Repeating this phrase often during the semester, at the beginning of class, then re-enforces the concept. Other opportunities come for repeating the phrase, such as when a student begins to dose off in class, or yawns. [For more, see my prior blog post on this particular subject, "College Students: More Sleep = More Sex" at http://scholarfp.blogspot.com/2012/08/college-students-more-sleep-more-sex.html.]

Second, I knew that I needed to address the motivation of my students. How so? By focusing on success, the development of habits to foster success, and the realization that success requires work. Hence, at the commencement of each class I present one or more "Success Tips." A few minutes is often spent on these tips. These success tips are reinforced, as well. How? By using the reverse side of  quiz paper to lay out previously revealed success tips (any advertiser will tell you to "advertise" to a "captive audience" - such as when some students have finished the quiz and we await others to finish). By posting signs in the halls of my building, with success tips. By offering, at the appropriate time during a semester, extra credit to students for them to write an essay on which success tips were most impactful to them. Lastly, at the end of the semester, by taking a private survey of the success tips, to ascertain which ones were most impactful. (These last two measures have the added benefit of enabling me to discard success tips that did not relate to the students, and finding new ones that may.)

Another technique I use is to ask the "Five-Year Question" (a question I often used in financial planning practice), but modified to fit the students. For example, have students write a short essay outlining what their perfect job would be in five years, and also in 15 years. Have them also write, in the same essay, what they would likely be doing in five years if they do not acquire a college degree. This is all about establishing goals. Then I explore with students the concept of S.M.A.R.T. Goals, as the means of completing building blocks for the foundations of their 5-year and 15-year success.

Third, I knew that "Success Tips" and goals establishment and sleep, combined, were not enough to change student behaviors, especially for the freshmen and sophomores I teach in my Business Law classes. While students are given the opportunity to learn various skills to tackle study habit shortcomings, such as "time management" skills, I feel that too often such training "misses the boat." The real challenge for many students is to improve their "self-control muscle." In fact, as I've written elsewhere in this blog, the ability to exercise self-control is perhaps the major determinant in success in all aspects of one's life.  [For more on this concept, visit my recent blog post, "The Secret of Your Success: Self-Control," at http://scholarfp.blogspot.com/2013/02/the-secret-of-your-success-self-control.html.]

Again, such instruction is re-emphasized throughout the course, and expanded by covering techniques to avoid procrastination (see the YouTube video, "Charlie on Procrastination," for example). The statement we repeat out loud in class all the time is "Just Do It. Do It, Do It, Do It. Do It Now." Students are encouraged to say this statement (or the short form of it, "Just Do It!" - out loud - whenever they possess an inability to get started on an assignment they need to tackle.

Fourth, to address some of the inferior study skills students possess, I instituted the practice of students writing hand-written outlines of each chapter. And I grade a sampling of these outlines. I also permit students to use these hand-written outlines during quizzes and exams. (My exams are structured to stress deductive reasoning skills for my lower-level undergraduate students, and synthesis of the material and application to client situations for my upper-level students.) The outlines are my way of ensuring that students spend time covering the material.

Fifth, I use techniques to "expand each student's comfort zone." For example, students must repeat, loudly, the phrase "Ooze Confidence" in class. [See my prior blog, at http://scholarfp.blogspot.com/2013/01/college-students-ooze-confidence-and-if.html]. We watch, in class, a TedX video on the benefits of a 2-minute "Power Pose." I explore various concepts, such as "Rush Toward Your Fear," in class. [See my prior blog on this subject, at http://scholarfp.blogspot.com/2012/08/rush-toward-your-fear.html.] I also provide instruction on "How to Meet Someone for the First Time."

Of course, just teaching students the principles behind good socialization skills is not enough. Practice is essential. Hence, one class each term my students confront "The Three Challenges of Alfred State." They must shout out a success tip (loudly) in front of the class (and passer-bus) at our bell tower on campus. They must introduce themselves to one of our Vice-Presidents, in the intimidating environment of the executive office suite on campus. And they must go up and introduce themselves to someone they do not know, and gather some information. Other exercises are used, outside of the classroom, and often through extra credit assignments, to get students to further push out their "comfort zones."

I also have instituted "Smile, Greet and Walk Tall" days in the halls of our building, on various days during the semester. This is a pilot program, at present. In a few months I will assess whether this very limited pilot program deserves to be conducted more widely (perhaps campus-wide).

While all of the foregoing is important, the sixth and final strategy utilized was to make class instruction as engaging as possible. For educators reading this, you are no doubt familiar with many of the strategies which can be utilized. For example, introducing short videos into the classroom. Guest speakers on various subjects. "Team Jeopardy" competitions in class. Peer-to-peer instruction to emphasize various important points. Class projects of a collaborative nature, undertaken in part during class under a watchful eye. Heavy use (where appropriate) of online resources which students access in class. And many others. I have not found that a single technique is "best" - rather, I find that a mixture of many instructional techniques works best.

Currently I expect my students to conduct the readings prior to class, so that we can focus our class time on applying the concepts.  But I've found that many students are challenged to sit and read for hours.  Hence, this summer I'll be preparing to more fully "flip" the classroom. I'll be moving to an online book for one or two of more courses, which is editable by me. I'll then add to the online book short 2-3 minute videos to explain various concepts. Other videos will review examples. In this manner, when preparing for class students will be constantly moving back and forth between a few paragraphs of reading and short videos. I'll also use MindMaps to lay out the concepts in class, and to demonstrate connections.

What is the reaction to the foregoing? Very positive, I would say, from the anonymous student surveys conducted of the students in each class at the end of each semester. Many students have added comments on how a particular success tip has changed their attitude toward their education, or how a technique has aided them. Others have thanked me for pushing them out of their "comfort zone."

This is not to say that there is not room for improvement. Indeed, one of the concept I try to instill in my students is the necessity for "continuous improvement."  For example, one of the expectations students possess of me (as discerned when I ask them on the first day of each class) is that I am "humorous." While I have a dry wit, and use humor several times during each class (by design, usually), I find that some students relate more to stories with humor embedded therein. Hence, I take time before each class to ask myself, "What can I do to add a bit more humor, or stories, to today's lesson plan?" Hopefully my future scoring on "humor" at the end of each semester, which has ranked a bit below my otherwise high marks for meeting other expectations of the students, will improve in future surveys.

I have heard from some of my fellow colleagues that we should not "coddle" our students in such ways.  Rather, they are "adults" and should be able to complete their lessons and achieve success without devoting time in class to such techniques to motivate and educate our students. In a way I feel this is a "cop-out." But in some sense, my colleagues may be right. There is a danger - that students will not learn to complete tasks "on their own."

But I don't accept the premise that our current crop of freshmen should not receive some instructional training and motivation to succeed. It seems to me more than appropriate to seek to improve the retention rates at our college, in order that an ever-higher percentage of our entering students are able to actually attain their degrees (and the higher levels of career and financial success that nearly always comes with same).

But the danger of "coddling" is there. Fortunately, students are exposed to a wide variety of teaching styles as they progress through our college. Hence, if I can teach students how to become better students - more motivated to succeed, with better self-control and socialization skills, and possessing of enough sleep, then I'm certain the students will get enough "practice" of these skills - without constant reminder from the professor - in other courses taught by other faculty. (This shows that having a mix of teaching styles is valuable, in every curriculum.)

I would also note that the skills employers desire most - critical thinking, the ability to work in teams, the ability to complete a task without need for supervision, and the ability to relate to colleagues and clients successfully - are the practical skills which some of my instruction in each class seeks to more directly address.

To me each class is an opportunity - to expand our students' minds. To foster their desire to learn. To foster their entrepreneurial spirt.

Each class I teach is also a responsibility. To use the limited time I am granted with each group of students to put them on the path, not just for mastery of the technical subject matter at hand, but to a more successful path in all aspects of their future lives.

Admittedly I, myself, have much to learn. But, for now, I share the foregoing perspectives, in hopes that other educators may find some value in same. And I welcome your comments and suggestions.

Professor Ron A. Rhoades, JD, CFP(r) teaches Business Law, Retirement Planning, Investment Planning, Employee Benefits Planning, Money & Banking, Insurance & Risk Management, and the Personal Financial Planning Capstone courses at Alfred State College, Alfred, NY. He is an EPLP Mentor, C.R.E.A.T.E. program mentor, serves as advisor to Alfred State's Business Professionals of America club, and serves as academic advisor to dozens of students.

Professor Rhoades is the author of "CHOOSE TO SUCCEED IN COLLEGE AND IN LIFE: Continuously Improve, Persevere, and Enjoy the Journey," a 10-week program for success in college (available for $2.99 in Kindle store at Amazon.com, or in paperback for $6.99). Professor Rhoades may be reached by e-mail at: RhoadeRA@AlfredState.edu.

Saturday, February 16, 2013

The Secret of Your Success: "Self-Control"


THE SECRET OF YOUR SUCCESS

Studies show that f you possess “self-control” you are far more likely to be wealthy, happy, and well-adjusted.  In fact, self-control is more important than intelligence, SAT scores, or family background.
“Self-control” is the ability to control one's emotions, behavior and desires in order to obtain some reward later.

Yet most persons (including college students) suffer from problems with self-control … whether it be in the achievement of the completion of a common college task (e.g., homework or test preparation) or with regard to matters with huge long-term financial implications (e.g.., not incurring credit card debt you will have difficulty paying off).  During decision-making moments a person often places disproportionate weight on immediate costs and benefits, rather than what is important for the long-term.

The good news is that “practice makes (nearly) perfect.” That’s because self—control is like a muscle … the more you use it, the stronger self-control gets. That’s also why it is hard to “get back in the groove” after a break. At the same time, you may be aware of individuals who, through practicing self-control continually, develop an immense ability to exercise self-control, even when accomplishing many tasks requiring self-control in repetition.

But how does one begin to “practice” self-control? One must first understand that goals and rewards which are abstract and likely to be achieved only in the future, such as “securing a good education, good grades, and landing a good job,” are likely to be de-valued relative to those goals or rewards which can be achieved in the very near-term and more concretely. For example, “play video games now” or “let’s go out” – while neither possesses a great long-term positive effect on one’s development – are much more concrete and near-term (and hence are more motivating) to a person than “outline this chapter in order to do well on the final exam several weeks from now.” Hence, the first step to better self-control is simply being aware that your brain assigns abstract and far-off goals less value.

While externally-imposed deadlines, such as professor-imposed deadlines to submit an assignment, are generally met, life won’t always involve situations in which deadlines are imposed by others upon you. In the real world, you will need to self-impose upon yourself your own deadlines … and learn how to stick with them.

One way to enhance your own self-control is to adopt a near-term reward for a goal: “If I finish outlining this section of the chapter, I will then be able to be on Facebook for 10 minutes.” (It would be best if a timer is then set.)

Another such a technique is a “pre-commitment” device.  Often this is where one puts the wrong choice beyond reach. For example, a student who shops weekly for snacks for her or his dorm room might only purchase a week’s supply of 100-calorie snacks. By eschewing snacks with higher calorie content the student does not have to confront the difficult choice of whether or not to eat an unhealthy snack. And by limiting the number of snacks purchased to a week’s supply (even if a larger quantity purchase would result in discounts), the student becomes more aware that eating the 100-calorie snacks all in the first few evenings results in the prospect of no snacks later in the week.

What are some other pre-commitment techniques?
  1. Study in a controlled environment, like the library (better yet, undertake a mutual promise with a friend to study there until a certain time);
  2. Turn off your smart phone;
  3. Leave your video games at home – don’t bring them to your dorm room (or, if they are already there, disconnect them and put them in a dark corner of your closet);
  4. Turn off your internet connection on your computer (unless you need it for the assignment);
  5. Plan to reward yourself with a recreational activity – but only after you have completed your assignments; and
  6. Make a commitment to meet a friend at a particular time in the gym, in order to exercise.

In the real world few supervisors desire to deal with employees who need to be constantly provided deadlines in order to get projects accomplished. In this regard, your ability to exercise self-control is a key factor affecting your retention and promotion within a firm.

Of course, practice is just that … practice. You won’t always succeed in exercising self-control. No one is perfect. There will be lapses. But, over time, and with continued practice, your capacity to exert self-control can substantially increase, leading to a much more fulfilling and rewarding life.

Do you have 25 minutes to learn more about self-control … In order for you to be more successful for the rest of your life? Watch these videos:

Professor Ron A. Rhoades, JD, CFP(r) teaches Business Law, Retirement Planning, Investment Planning, Employee Benefits Planning, Money & Banking, Insurance & Risk Management, and the Personal Financial Planning Capstone courses at Alfred State College, Alfred, NY. He is an EPLP Mentor, C.R.E.A.T.E. program mentor, serves as advisor to Alfred State's Business Professionals of America club, and serves as academic advisor to dozens of students.

Professor Rhoades is the author of "CHOOSE TO SUCCEED IN COLLEGE AND IN LIFE: Continuously Improve, Persevere, and Enjoy the Journey," a 10-week program for success in college (available for $2.99 in Kindle store at Amazon.com, or in paperback for $6.99). Professor Rhoades may be reached by e-mail at: RhoadeRA@AlfredState.edu.

Friday, February 15, 2013

Ron Answers the Question: Must IRAs Be Handled in a Fee-Based Account?



In an article appearing at www.Financial-Planning.com, and specifically at http://www.financial-planning.com/blogs/Ask-Ed-Slott-Do-IRAs-Need-to-Be-in-a-Fee-Based-Wrap-2683302-1.html?ET=financialplanning:e12900:39431a:&st=email&utm_source=editorial&utm_medium=email&utm_campaign=FP_Daily__021513, Ed Slot opined in pertinent part:  "The Department of Labor does not require IRAs to be in a fee-based account, including wrap fees. Wrap fees are fees for investment services where the fee is a percentage of money under management."

While Ed Slott's answer is true, it does not address the potential consequences of the "Definition of Fiduciary" rule, if it is re-proposed (as expected) by the U.S. Dept. of Labor's Employee Benefit Services Administration (EBSA) later this year and subsequently finalized late in 2013 (or more likely in 2014 or 2015).

First, here's the technical explanation as to why the DOL's rules might impact IRA accounts.

  • As to the Dept. of Labor and IRA accounts, under the Internal Revenue Code issue: First, section 4975(e)(3) of the Internal Revenue Code of 1986, as amended (Code) provides a similar definition of the term "fiduciary" for purposes of Code section 4975 (IRAs).  However, in 1975, shortly after ERISA was enacted, the Department issued a regulation, at 29 CFR 2510.3-21(c), that defines the circumstances under which a person renders ``investment advice'' to an employee benefit plan within the meaning of section 3(21)(A)(ii) of ERISA. The Department of Treasury issued a virtually identical regulation, at 26 CFR 54.4975-9(c), that interprets Code section 4975(e)(3). 40 FR 50840 (Oct. 31, 1975). Under section 102 of Reorganization Plan No. 4 of 1978, 5 U.S.C. App. 1 (1996), the authority of the Secretary of the Treasury to interpret section 4975 of the Code has been transferred, with certain exceptions not here relevant, to the Secretary of Labor.

Hence, when the DOL/EBSA, as is expected later this year, issues a re-proposal of its "definition of fiduciary" regulation, in essence the broad exemptions previously provided disappear, and virtually any provider of personalized investment advice to a plan sponsor or plan participant would be a "fiduciary" and subject to ERISA's strict "sole interests" fiduciary standard and its prohibited transaction rules.

Does this means commissions would be outlawed for IRA accounts?  Not necessarily.  In my view, the fiduciary standard, whether under ERISA ("sole interests" fiduciary standard) or under the Advisors Act or state common law ("best interests" fiduciary standard), does not outlaw the receipt of commission-based compensation.  However, the receipt of differential compensation (a.k.a. variable compensation) (i.e, if commissions and/or other compensation varies depending upon product recommendation) becomes problematic.

I would also opin that 12b-1 fees, as seen in Class C and Class R shares, are also not likely to be outlawed by EBSA, although some pundits have stated otherwise.  However, 12b-1 fees are already under scrutiny by the SEC (although no action on this issue is likely soon), and some on the Commission would like to see the authorization for 12b-1 fees rescinded.  In addition, some concerns exist that, since 12b-1 fees cannot typically be negotiated (beyond various share classes, such as R-1, R-2, etc. in the retirement plan context), the Sherman Antitrust Act may apply and the practice of 12b-1 fees, especially as to retail investors, may be an unlawful fixing of prices and an unlawful restraint of trade.  Whether the U.S. Department of Justice's Antitrust Division will ever bring an action to stop 12b-1 fees remains an outstanding issue.

Note that there is likely to be an exemption granted to the prohibited transaction rules for brokerage firms who receive brokerage commissions for doing trading for funds.  Whether the exemption will cover higher brokerage commissions paid in the nature of soft dollars is unknown.  And whether mutual funds will have to prove that "best execution" is undertaken by using brokerage firms (who sell the funds to ERISA and IRA accounts) - especially when trading costs can be minimized through the use of electronic crossing networks (and dark pools, a variation of same), is another issue.  There can be a vast disparity between brokerage commissions paid by some mutual funds relative to others, even of the same relative size of fund, type of security, and portfolio turnover characteritics, due to these "back-door" forms of compensation.

I would note that the receipt of "payment for shelf space" by a brokerage firm is very problematic under the ERISA standard.  It is difficult to see how the DOL could issue a blanket exemption for this, where there does not appear to be any benefit to a fund shareholder from same (a requirement for an exemption to be granted). In theory, payment for shelf space payments deter funds from reducing their management (investment advisory) fees, and are contrary to the interests of fund shareholders.

Hence, I suspect that mutual funds and brokerage firms will need to change their business practices.  A good approach would be to only have one method of compensation, with no other forms of compensation provided by the fund to the brokerage firm / registered representative.  This could be commissions, or could be 12b-1 fees (if not otherwise outlawed), or could be AUM-based compensation paid by the plan participants (and deducted from account balances), or could be even flat fees paid by the plan sponsor (and/or deducted from account balances).

In any event, I believe some of the brokerage firm / mutual fund arrangements must change, such as payment for shelf space and soft dollar compensation - and any arrangement in which a fund is granted "preference" (in return for some form of compensation).  Payment of "educaitonal" or "marketing" expenses by fund companies would likewise be outlawed under ERISA's prohibited transaction rules.

Other interesting issues exist, including the sharing of securities lending revenue with distributors of funds, and many issues involving proprietary mutual funds.

We will have to see what EBSA comes up with, if and when their re-proposed regulation emerges. (I hope the DOL/EBSA submits its re-proposed rule soon).  And the EBSA's final rule, if ever adopted, would not likely be effective until 2014 (or later).

So, keep your eyes peeled, and be ready to change certain business practices and compensation methods if necessary.  If you only have a Series 6 or 7 license, you may desire to pursue Series 65 licensure, as a means of providing yourself greaterly flexibility in fee arrangements in the future.  Hope this helps.

More to come.