Pershing LLC Chairman and CEO Richard Brueckner, COO Brian Shea, and managing director Frank La Salla sat with Investment Advisor for an exclusive interview at the firm's annual conference in Hollywood, Florida, on Friday, June 11. The conversation focused on the company's direction in the face of new regulation, the euro debt crisis, and the advisor industry's move to independence.
"At this conference two years ago, the advisor and RIA attendees wanted to know about international investing, but it was more simple and straightforward: 'How do I invest in BMW?'" La Salla began. "Today, it's still about overseas investing, but it is much more sophisticated."
"In the interim, it was about a massive flight to quality," Brueckner added.
Specifically, La Salla said attendees want information of two- and three-year foreign paper, such as Australia or even Germany. They are also interested in individual foreign stocks and foreign currency, but also low risk vehicles. Sovereign debt from quality countries is also popular, and Brueckner noted advisors and investors don't have to go far to get it, naming Canada as one such country.
"With budget deficits the way they are here in the U.S., they now see risk here and look to mitigate it by going abroad," Shea said. "People are increasingly interested in foreign exchange as an asset class."
When asked who now owns the debt that led to the global crisis in 2008, and more recently the crisis in Greece and Portugal, Brueckner said it isn't known.
"Regulators might know, but they don't talk to one another," he said. "Disclosure rules in Europe aren't like they are in the U.S."
New Initiatives
The executives also spoke about Pershing's new initiatives for both its broker/dealer clearing clients and RIAs. Specifically, Shea mentioned Pershing's RIA Complete effort, which gives independent broker/dealers two different options for accommodating reps who are doing, or want to do, advisory work. Some 20 B/Ds are already participating in RIA Complete, said Shea.
