In 2025, Brian Hamburger marks 25 years since founding MarketCounsel and HamburgerLaw, two well-known firms in the RIA community. Over the past quarter-century, he has navigated issues as the industry evolved, advocated for best practices and guided many firms through both opportunities and challenges.
This series, “War Stories of the Past 25 Years,” delves into the defining moments and hard-earned lessons from his career. Over the course of this series, WSR will bring you lessons and insights from his experiences in navigating the SEC, building compliance frameworks, managing litigation, addressing conflicts of interest, orchestrating M&A and predicting the next quarter century.
These articles will provide Hamburger’s views, his trials and triumphs, and his recounting of transformations of the RIA space. His experiences offer insights into building and sustaining a financial advisory business for both new entrants and seasoned professionals.
In this first installment, “SEC: The Beginning of the Journey,” we ask Hamburger about his vision for the firms, initial challenges, how the SEC has evolved and significant lessons from the past 25 years.
Setting the stage: What was your vision for MarketCounsel and HamburgerLaw when you founded them 25 years ago?
Hamburger: My father was a financial advisor, and as a curious youth I listened as he discussed the challenges of the business with his peers. After sitting in his study groups, I would research the rules and regulations that they were complaining about difficult and discovered that they were often “fighting ghosts” – that is, they were fighting imaginary obstacles due to their lack of understanding the rules and regulations. I wanted to distill complex issues into elegant solutions with clear, achievable goals and present advisors with the positive message: “We’ve got this.”
They were fighting imaginary obstacles due to their lack of understanding the rules and regulations.
The life of an entrepreneur can be lonely. When they have problems to solve, it’s not just about the problem – they want to be heard and understood. Empathy with clients governs the firms I founded, giving rise to our slogan: “The adviser’s advisor.”
We approach clients with humility to listen carefully, balanced with a swagger to drive the conversation toward the real issues that they really have to address.
Navigating regulatory compliance: What were the biggest challenges you faced in helping RIAs navigate regulatory compliance in the early years?
Hamburger: I designed both firms to focus on acting as the client’s steward. For instance, when you ask a client if they have any conflicts of interest, they usually say no, but if you ask more nuanced questions as a true steward would, you may find potential conflicts exist that the client, with the best of intentions, assessed and determined they would never lead to harm.
A steward mindset is extremely important in making disclosures. Since disclosure is at the foundation of an adviser’s regulatory obligations, deficiencies can be met with severity. From the early days, we were careful to know enough about each client to produce high quality, robust disclosures.
The second challenge from the founding of MarketCounsel and HamburgerLaw was striking a delicate balance to ensure that our clients took their regulatory obligations seriously without being preachy about them. For instance, we urge senior executives to consider regulatory compliance as a core, executive function within their business, Improper delegation can be fatal to the business. However, nagging from a soapbox is totally counterproductive. I think we have learned how to thread the needle.
Shifting landscape: How has the SEC’s approach to regulating RIAs evolved over the past 25 years?
Hamburger: In many ways, the SEC primary focus is no different than it was a quarter century ago. It still promulgates and finalizes rules, then examines for compliance with those rules. However, we’ve seen some significant advancements in their tactics.
First, transcribed and accessible data has vastly increased. Texts, emails, meeting minutes and other recorded data are voluminous. Any random remark, regardless of channel, may provide a basis for SEC allegations.
Any random remark, regardless of channel, may provide a basis for SEC allegations.
Next, regulation by enforcement has trended upwards dramatically. As decades old laws and regulations no longer fit modern use cases, they are interpreted and enforced in novel contexts through SEC examinations. This surprises firms that thought they were in compliance, leading to frustration as a result of these seemingly unclear industry standards. Though principles-based regulation has its positives, there must be clarity for the industry to align around commonly accepted standards of conduct.
Finally, the SEC has become much more efficient about taking their original work and finding parallels and similarities to apply their efforts towards similar infractions. You’ll hear about these tactics with sweep exams, but they are far more prevalent than that. This efficiency has helped the SEC become far more effective over the years.
Key lessons: What’s the most significant lesson you’ve learned about dealing with the SEC that new advisors should understand?
Hamburger: I always emphasize that a client should never lie or mislead their lawyer. To be an effective advocate, I need to know everything that I can about the issue right from the beginning – regardless of whether one wants to reveal such information or not. Sometimes, clients are unclear on what is relevant and the attorney needs to distill the facts.
Armed with all details, a lawyer must answer SEC examiners directly and truthfully while being careful to never over-share and expose the advisor to additional scrutiny. In any statement responding to an inquiry, the precise truth is required, but many respondents provide answers to questions the SEC didn’t even ask.
Many respondents provide answers to questions the SEC didn’t even ask.
Also, the SEC will ask for information that is within the advisor’s compliance obligations and analysis that is not. A seasoned lawyer needs to know the client’s obligations and rights and not blindly respond to any and all of the regulator’s requests blindly. Recently, one of my clients was asked to perform an analysis on data that the SEC was entitled to request.
While the data itself was fair game, the client had no obligation to analyze the data and draw conclusions for the SEC, so we pushed back. Besides burdening the client with the analysis, they would have been culpable for any errors or omissions which would have exacerbated the issue. It was the right move. The SEC decided not to pursue any action in that case.
The next installment of “War Stories of the Past 25 Years” will be “Compliance: Building a Strong Foundation.” We will discuss compliance programs, innovation in compliance, and the evolution of and lessons learned from regulatory examinations with Hamburger.
Julius Buchanan, Editor in Chief at Wealth Solutions Report, can be reached at julius.buchanan@wealthsolutionsreport.com.
