CHICAGO - Clients are mad as hell and they're not going to take it anymore … unless the industry makes some changes, Stifel’s chairman and CEO told a major industry conference on Thursday.

Before Ron Kruszewski began speaking at the Securities Industry and Financial Markets Association's Private Client conference, he played a clip of Peter Finch's famous monologue from the 1976 film Network.

"I want you to get up right now and go to the window," Finch shouted. "Open it, and stick your head out, and yell, 'I'm as mad as hell, and I'm not going to take this anymore!"

When the clip ended, Kruszewski said: "I'm going to speak to you all about things you might find uncomfortable [and] you might find controversial [but] on this topic of trust and confidence, we need honest and straightforward dialogue to make sure that not only do our clients not look like the one in the video, but that we don't lose a generation of investors paramount to our industry's success."


Trust in financial institutions is at a record low, he said. "Let's look back at what our kids have seen in the last 10 to 12 years," he added as he clicked though a list of over half a dozen regulatory issues from TARP bailouts to the Facebook IPO. The common theme was that all of those events began outside of the private client group, he said. 

"I'm half institutional and half private client," Kruszewski said. "When I worry about public trust and confidence, I worry about my institutional side of the business. I do not worry about the broker side of the business."

Wealth management divisions have their share of "rogue brokers" he acknowledged, but the real issue they have to deal with is how the culture of the firm as a whole is not centered around image. Investors may have positive relationships with their advisors, but trust in the name of the firm has declined over the past decade, he said.  

"I'm going tell you today that you as a group need to demand that your firms change so you don't deal with your clients with the issues that occur in the firm," he said. 


Kruszewski also called for a change in focus among regulators, citing a proposal that advisors disclose retention packages to clients as an issue that has received too much attention. 

"I'm virtually certain that the relationships that the clients think they have with you or the retention bonuses paid to firms have zero to do with the financial crisis and have zero to do with the erosion of public trust and confidence," he said. "Yet what are we talking about today? We're talking about whether a broker should disclose pay when he moves."


Trust and confidence begins with a change in the culture of the firm, which advisors are responsible for demanding and upholding, he said. 

"Recognize what caused these issues that i spoke about previously that those issues start with the right culture," he said. "The firms need to improve their image and hence improve trust and confidence and i think we'll all have a great next decade."

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