Change Agent: Lisa Gok, Cetera 

We’re talking to leaders about significant changes in the industry and their organizations – progress regarding product, process, technology, or culture. We’re curious about the how and the why. And we’re asking about what changes are next.  

We asked Lisa Gok, Chief Legal Officer at Cetera, a network of registered investment advisors and independent broker/dealers, regarding advice given to the future generation of financial advisors, the important components required for significant breakthroughs within the firm and the industry, and how to successfully move from traditional ways to exploring new frontiers inside the organization. 
 
Charting a New Course: How do you navigate the transition from established practices to pioneering new frontiers within your organization?  

The past couple of years have brought tremendous changes in the legal and regulatory environment surrounding the wealth management industry. The adoption of SEC Regulation Best interest and the DOL regulations covering investment advice to qualified plans and IRAs are the most far-reaching and fundamental in more than 25 years.   

We have been forced to re-think our approach to not just compliance, but in how we select the products and services we make available to our clients.  Technological advances have in many cases made this easier, but it has created a greater urgency for large organizations such as Cetera to be flexible in developing new processes to comply with legal obligations.  

Catalysts for Change: What are the essential elements for significant progress within your organization and the industry? 

Flexibility and the importance of partnering with all areas of the business in developing solutions to evolving regulatory requirements. The size and scale of our organization is such that we cannot operate in silos as we might have been able to do in the past. Access to accurate and current data and IT applications allowing it to be used effectively are more critical than ever.  

Industry Inspiration: What recent industry advancement impresses you the most, and why?  

Artificial intelligence will radically change the wealth management business in the next 10 -20 years, although we cannot necessarily predict how or when. Much of the work that financial professionals do seems to be specifically adaptable to AI.  Forward thinkers have a chance to create real competitive advantages.  

The Road Ahead: Looking forward, what critical changes do you foresee for the industry in the coming years? What advancements do you hope for?  

Two major trends: the first is continued refinement of the best interest obligations to customers in connection with recommendations to purchase or sell securities or engage in investment strategies. Reg. BI has been in effect for over four years, and it appears that the SEC and FINRA have gathered enough information about the industry response and practices to begin bringing targeted enforcement actions involving insufficient efforts by firms.   

The second major trend is the continuing evolution from commission-based brokerage relationships toward fee-based advisory relationships. Each model has its pros and cons, but all of them must be considered with respect to the circumstances of the individual client. One size does not fit all, and both advisers and regulators need to be mindful of that.  

Guiding the Next Generation: As we acknowledge the industry’s rising stars, what guidance can you offer them to become catalysts for positive change?  

Be flexible and seek out mentors. Making mistakes is inevitable, but younger professionals should try to learn from mistakes that others have made in the past rather than repeating them. Mentors are great sources of perspective for younger professionals. 

Pictured: Lisa Gok, Chief Legal Officer at Cetera 

Click here to see the full Change Agents: Leaders Driving Progress series