About Us
The partners at K-R Group have been in the Financial Services industry for over 40 years. The decision to form the K-R partnership was made in 2005. Up until 2005 we had worked in the Broker/Dealer, Registered Representative side of the industry. We continued in that sector until the upheaval of 2008.
Prior to 2008 we had formed a joint opinion that the commission driven investment business plan was seriously flawed. The Registered Rep is required to register with an independent Broker Dealer. He or she is required to only sell products that the BD had approved and placed on their platform. The rep has little or no input on the products selected by the BD. BDs would routinely select companies and their products based on the commissions they would agree to pay the selling reps and the company’s willingness to support the BDs annual conferences. The reg reps, not surprisingly, became only concerned with the commission they would be paid and paid little attention to the product itself and the suitability of the individual to whom they were selling.
This structure, and its lack of concern for the investor led to BDs running afoul of FINRA and their being closed because of customer complaints or fraudulent activities of the products they presented to investors. Because the Reg Rep could only represent one BD at a time, they were constantly looking for new BDs to sign with as their current BD was cited and closed by FINRA.
The upheaval of 2008 was the catalyst for us to step back and analyze where we wanted to be in this industry. A separate category within this industry is the Registered Investment Advisor community. The RIA, unlike the BD or Reg Rep, have a Fiduciary duty to clients.
A fiduciary is a person or organization that acts on behalf of another person or persons, putting their clients’ interests ahead of their own, with a duty to preserve good faith and trust. Being a fiduciary thus requires being bound both legally and ethically to act in the other’s best interests.
We rewrote our business plan to deal only with RIAs because of this responsibility and the resultant desire of the RIA to fully understand the product they were presenting to their clients. The movement of some of the individual RIAs to Family Offices has exposed us to CPAs and Tax Attorneys who work under the same fiduciary standards of the RIAs.