With the REISA 2014 Spring Symposium in full swing earlier this week, the DI Wire was able to chat with 2014 REISA President Mark Kosanke. Being a founding partner of Michigan-based Concorde Financial Group, he is familiar with the challenges and rewards of the direct investment (DI) industry.
Kosanke offered his thoughts on the DI space and view of the future from the perspective of a registered rep, a principal of a broker dealer, and president of REISA.
Challenges and Opportunities
Considering the record year Direct Investments experienced in 2013, Mr. Kosanke believes there is still opportunity for growth. He sees another robust year in capital raising, in part, due to the expected liquidity events.
In future years, Kosanke sees several challenges for the industry. He believes the pace at which products turn or provide liquidity will slow, there will be more reps moving to the RIA platform, and competition from direct advertisements, thanks to the Jobs Act.
With challenges, usually come new opportunities.
Many sponsors are already offering RIA friendly products, however, have yet to take off. Kosanke believes the success of creating quick liquidity events has made the front end fee laden products more attractive. In future years, with less turn over, these investment offerings could gain in popularity.
From a broker-dealer standpoint, these new products are opportunities, but also create obstacles to overcome.
“The challenge will be how do we have to price them on client statements? What extra due diligence are we going to have to do?” said Mr. Kosanke.
Attending REISA events has helped Mr. Kosanke’s own business through the relationships he has formed and the knowledge he has gained.
“I wouldn’t be doing half of the products I do, if I hadn’t been coming to these events,” says Kosanke.
He would like other advisors to benefit the way he has from REISA. He hopes the trade group will become a well-known pillar of education and a resource for both broker-dealers and financial advisors alike.
“We’ve worked very hard at making REISA an educational forum,” he commented.
An example of one such effort at REISA’s Spring Symposium this year is that attendees receive a syllabus for each session they attend. The syllabuses include information on panel members and important points to take away from the session providing advisors significant documentation.
“It’s just another thing you can show FINRA when they walk into your office and ask you, ‘what are you doing for education?’ My attempt there was to make it more meaningful for reps to be here and more palatable for the BDs to say, ‘Hey, we embrace you going to the REISA conference,’” commented Mr. Kosanke.
REISA is eager to interact with broker-dealers and sponsors of any size, as well as both experienced and inexperienced representatives. It seeks betterment of the industry and the building of beneficial relationships between parties introduced under its facilitation and guidance.