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Synergy25 Live Ep. 9: Dan Gallagher on Empowering Advisors in a New Regulatory Era
25 Plays7 months ago
As 2025 shapes up to be a pivotal year for financial regulation, advisors are asking: what will the new SEC landscape mean for their practice, and how can they navigate with confidence?
In this episode, Bill Coppel, Director of Client Growth at TradePMR, and Ryan Neal, Senior Editor at TradePMR, sit down with Dan Gallagher, Chief Legal, Compliance and Corporate Affairs Officer for Robinhood Markets, on the unique opportunity advisors have to make their voices heard in Washington. .
Listen as they explore:
- What can advisors expect under the new administration
- How Robinhood is taking an offensive stance to protect advisors and their clients
- Why advisor’s voices matter more than ever, and how Robinhood is working to amplify them
This episode was filmed and recorded in May 2025.
If you want to join the conversation or connect with us, please visit us at synergizepodcast.com. This content is provided for general information purposes only.The views expressed by non-affiliated guest speakers are their own and do not necessarily reflect the opinion of TradePMR Inc. or its affiliates. TradePMR Inc. and its affiliates do not endorse any guest speakers or their companies and therefore give no assurances as to the quality of their products and services. This channel is not monitored by TradePMR Inc. TradePMR Inc. does not provide investment advice, tax advice or legal advice. TradePMR Inc. is a member of FINRA and SIPC. TradePMR, Inc.,is registered with the Securities and Exchange Commission {SEC) and the Municipal Securities Rulemaking Board (MSRB). TradePMR provides brokerage and account services to registered investment advisors. Custodial services provided by First Clearing. First Clearing is a trade name used by Wells Fargo Clearing Services, LLC, Member SIPC, a registered broker dealer and non-bank affiliate of Wells Fargo & Company. Copyright 2025. TradePMR, Inc. For a transcript of this episode with sources, visit synergizepodcast.com.
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Transcript
Introduction to Synergize Podcast
00:00:05
Speaker
Hi, I'm Bill Capelle, Chief Growth Officer for Trade PMR, a Robinhood company. And I'm Ryan Neal, Senior Editor at Trade PMR slash Robinhood. And you are listening to the Synergize Podcast.
00:00:17
Speaker
We're coming to you live this time. That's right, Ryan. We're live here at the JW Marriott in Tampa for Synergy 25, the Trey PMR signature conference.
Featuring Dan Gallagher from Robinhood
00:00:27
Speaker
We had a chance to sit down with one of our featured panelists, Dan Gallagher.
00:00:32
Speaker
Dan is a former SEC commissioner and currently serves as chief legal compliance and corporate affairs officer for Robinhood markets. So in just a bit, Dan is going up on stage here at Synergy ah to give a front row view into the evolving regulatory landscape, something I know that advisors care deeply about.
00:00:52
Speaker
ah So we're excited that he was able to stop by the podcast booth here and share some of the insights for those of you that weren't able to attend this week. As both a former SEC commissioner, as I mentioned, and now a leader at Robinhood, Dan has a unique vantage point on where financial regulation is headed and what it means for the future of advice.
00:01:13
Speaker
To learn more about Dan's story, please visit our show notes. So Dan, thanks for being here. Oh, thanks for having me, guys. I'm really excited to be here.
Key Regulatory Changes by 2025
00:01:21
Speaker
Well, let me start here, Dan. I think it's fair to say that 2025 is shaping up to be a pivotal year for the industry um and particularly for financial regulation under the new administration. And a lot of the changes are taking place and you're no stranger to Washington. That's for sure. ah What regulatory shifts in 2025 do you see as important for financial ah for the financial advice industry?
00:01:45
Speaker
So look, I think 2025 represents a sea change in the regulatory environment. The last four years, for for most in financial services, I would say were pretty tough. It was an intense regulatory environment, whether it be crypto, crypto,
00:02:03
Speaker
ah whether it be the provision of retail financial services, institutional trading, wherever you looked, there was a lot of regulatory scrutiny and not a lot of transparency, quite frankly, on on what the policies were.
00:02:18
Speaker
you know, with the new administration coming in, new Congress, a lot of promises of more transparency, lighter touch regulation, um and and And a focus, I think, for the first time in a while on capital formation. Right.
00:02:34
Speaker
You know, in addition to just saying we're going to focus only on rooting out fraud or investor protection, we're actually going to try to facilitate capital formation. I think it's an it's a really exciting time.
00:02:44
Speaker
and It's going to take many flavors. We're only starting to see the very beginning of it right now. And they seem to change pretty regularly. Yes, they do. oh yeah. So we now have out the SEC's 2025 agenda, right?
00:02:55
Speaker
Or is it not out yet? Is it coming? It's coming, yeah. coming, excuse me. ah So what do you think advisors, our listeners, should be paying attention to? What should they be looking for or or anticipating? Yeah, look, I think a number of
Private Funds and Regulatory Rethink
00:03:08
Speaker
things. First of all, Chairman Paul Atkins, the new SEC Chairman, is no stranger to the advisory business. He's very well versed in it.
00:03:16
Speaker
I used to work for him when he was a commissioner at the SEC 20 years ago. And um I was always very impressed on his depth of knowledge in the advisor space. So he's going to come in.
00:03:27
Speaker
Very interested, I think, on those issues, but also, ah you know, private fund issues, you know, things that when he was a commissioner, there wasn't a lot of availability with respect to retail investors.
00:03:40
Speaker
I think you're going to see a lot of desire by Chairman Atkins to open up ah private investments to maybe rethink some of the regulation that happened under his predecessor.
00:03:52
Speaker
You know the custody rule, marketing rule, other things that apply directly ah to advisors. You know, I would hope and expect that they would rethink maybe even their enforcement policy vis-a-vis advisors. Not many folks know, but the SEC Enforcement Division actually has a, what they call a specialty unit devoted to investment advisors. And, you know, sounds great, sounds logical until you realize, you know, you get what's your resource.
00:04:17
Speaker
So if you start hiring a bunch of enforcement people to pay attention to an industry, they're gonna bring cases, good or bad. That's right. And so I think rationalizing some of the enforcement cases that have come out too will be a really good development.
00:04:30
Speaker
That's good. um You know, the idea of cyber risk and the idea of client disclosures, financial disclosures, still be are still at top of mind, particularly with FINRA.
00:04:43
Speaker
How do you see those two initiatives continuing to evolve in 2025?
Cyber Risk and Principle-Based Regulation
00:04:49
Speaker
Yeah, I think, look, cyber is just omnipresent and ah luckily i would say defies most of the petty politics that you yeah you see in DC.
00:04:59
Speaker
You need to protect your systems. You need to protect your customers' information. um you know No company is a stranger to that. you know Everyone's experiencing attacks. The government itself is experiencing attacks.
00:05:13
Speaker
I do think you know the idea like the s that prior SEC took of yeah telling public companies you have X amount of days to tell us about a cyber attack. you know That to me is one of these things that it happens in the faculty lounge. Right. They have they have no idea what what it means. And I've lived through it with Robinhood, you know, in publicly ah disclosed breach that we had in the fall of 21.
00:05:36
Speaker
So many decisions need to be made. So many facts are needed before you make those decisions. Sure. And the notion that let's start a four day time clock on you before you make a public disclosure, which could be very counterproductive.
00:05:51
Speaker
um You know, sometimes you'll have the criminal authorities involved. They'll be telling you not to say anything. but there's There's a whole bunch of things. And you know, most companies, I would hope to say all companies want to get it right.
00:06:03
Speaker
No one wants to be breached. No one wants to be hacked. No one wants their customers to be unhappy with them. That's a bad business model. You would think that just sort of the skin in the game of the situation would give you best practices.
00:06:15
Speaker
So I think the SEC, I hope the current SEC under Atkins will revisit that 8K disclosure for public companies. wrote um FINRA, you know meanwhile for its registrants, which are you know largely broker dealers and dual headed advisors obviously are pulled into that.
00:06:32
Speaker
you know They're rightfully concerned about the same thing. PII financial information, it's very sensitive information that flows through their member firms. I don't think the attention is gonna go away.
00:06:43
Speaker
from it at the federal level i do hope and expect though that it'll be little more rational a little more um you know higher level principles based more solution oriented as opposed to um you know chastising bad behavior now obviously we have to do that but i think the idea is how do we solve the problem right why don't we let's work together yes right we're all in this together you know uh i always thought it was hilarious when i was on the commission the Chinese hacked into the Office of Personnel Management and so took my SF-86. And so that's one of the most confidential documents you'll ever have written about you.
00:07:17
Speaker
And it's sitting in Beijing right now. So... I don't even know what SF-86 is. It's an FBI. It's like literally my whole FBI file. They came in and they stole it from all of us. ah and And then, you know, then you have the government yelling at you about what but you should be doing to protect things. Like, dear Lord, why don't you get SF-86 back first? Exactly.
00:07:36
Speaker
yeah Or at least get me a raise. That just that made me that makes me think of ah there's ah ah a Veep episode or plotline where ah the Chinese government hacks into their data, but they made a mistake. The office of Veep made a mistake, but they can't admit to it because then they would admit that the Chinese hacked them and they're all both... Anyway. that This is life. Great show. and The SEC had a hack on on the Edgar system. i mean it It happens to all entities, private or or governmental. and We all need to realize that and just try to get to common sense solutions. That's right. That's a good segue into the question I wanted to ask, which is around technology.
Tech Compliance and Data Protection for Advisory Firms
00:08:06
Speaker
because like As we said, the threat is there.
00:08:08
Speaker
um Advisory firms, especially the larger ones, often have a target on their back because of their relationship to ah you know ah wealthy people, their personal information and just their their assets, right? So they are targets.
00:08:19
Speaker
So in our ah you know evolving world and using more and more technology to serve investors, how do they navigate you know wanting to use a modern experience and serve clients with technology while also protecting their data and being compliant? How do they and they navigate that? Yeah, you know and not not being a technologist myself, I don't have a technical answer ah for you, but look, prioritizing the protection of PII is obviously first order for for all financial services providers, especially dealing with retail.
00:08:51
Speaker
um yeah Saying I'm just gonna put stuff in paper I'm going to defy you know where where the you know modern trends are moving. It's not the answer. It's getting the right vendors, getting the right infrastructure in place, testing, monitoring.
00:09:07
Speaker
But it takes a lot of work and it takes a big team and it and you know it takes you know a singular focus on protecting that PII. You I would say, based on what I've learned since I've been become a part of the Robin Hood family, is security is probably the number one thing we think about every day, whether it's cyber, everything from cybersecurity down to physical security. I mean, it's a really important issue, and I think it's one of our core values, if I'm not mistaken. Sure. Yeah, and so mean, Robinhood being app first, right? It wasn't no branch office, there was no bricks and mortar, you didn't have file cabinets. Everything is in the app and you know and in the cloud.
00:09:45
Speaker
um So we use, you know obviously great partners like AWS and their security protocols are second to none. And then it's incumbent upon us on the front end of things to make sure that we're not you know exposed in any way. And we have a really rigorous process with all of our vendors.
00:10:01
Speaker
And we're constantly reminded of it. And I'd have to say, is as horrifying as it was and in the fall of 2021, when we had our event, which turned out to be very contained, but you don't know until you know.
00:10:14
Speaker
ah But that was a great sort of institutional wake up call and reminder of how important this issue is. You wanna lose customer trust? you know, have a breach. That's it. It's amazing. Which leads me to this question. So as you look forward over the next 12, say to 18 months, what are some of the priorities you have relative to these issues that we're talking about?
Robinhood's Proactive Regulatory Strategy
00:10:36
Speaker
So look, I think for us, it's it's really this amazing pivot point for what I've built here at Robinhood over five years, our our our legal government affairs, external affairs groups that all report into me.
00:10:50
Speaker
We've been playing a lot of defense, you know, from 2021 until this January. And i think we did a really good job. I think we hired a lot of really good defenders and we had great external partners that worked ah with us on those.
00:11:05
Speaker
ah But now we're going front foot. We're trying to pivot to the offense. And I keep challenging the team, use your brain differently. right yeah You guys all have these big brains and you know how to defend yourself. you know Now let's learn how to you know to throw a punch. Let's learn how to you know work with Congress on legislation for crypto.
00:11:22
Speaker
or market structure or you know whatever it may be that impacts our customers and and helps our business model. That's a great point, Dan. And I think our listeners would appreciate to recognize, and if you'd say a few words about the impact you're having on regulatory affairs, you were very active in Washington. In fact, we're pretty much leading the dialogue around a lot of the innovative capabilities taking place, whether it's 24-hour-a-day trading or global trading and other issues
Democratizing Finance with Robinhood
00:11:53
Speaker
like this. Talk a little bit about how
00:11:56
Speaker
What is your approach to government affairs? How are you working with Congress and other members of the legislature to continue to evolve our ability to serve clients in a in a manner that makes real sense today? Yeah, you know and look, this the the answer is the the approach has evolved.
00:12:12
Speaker
you know Again, we were in a defensive, more defensive posture, I would say five years ago. Before we built out the government affairs capability, before we really introduced ourselves to Washington, opinions were formed right about Robin Hood and and a lot of them incorrect.
00:12:29
Speaker
um And so we had to build a ah machine, tiny ah but mighty, that could go and educate members of Congress, educate regulators, other stakeholders. What is this Robinhood thing? What's our goal?
00:12:41
Speaker
And I have to tell you, After a little while, it's an easy sell. The mission is so good. Democratize finance for all. Provide financial services to retail with no fees. Bring people in, right? When we have all these calls for increased financial literacy in America, but no one's taking the classes.
00:12:59
Speaker
if they're taking the classes, they're not getting it. What's the best way to to drive financial literacy? Get them in the markets. right And you can get them in when there's no account minimums, when there's no fees, when you're not gonna get discriminated against in any way, when we we bring And that's reflected, by the way, in the Robinhood customer base.
00:13:16
Speaker
and you And to a large degree, Robinhood's like leveled the playing field. Absolutely right. You should see, if we were on a video, I used to do this thing that drives my people crazy, but take the onion paper and you put it up. There's a Fed chart that shows increased retail participation over the last 10 years.
00:13:32
Speaker
It tracks the account growth in Robinhood. and And it also talks about diversity in retail trading. And it's increasingly a more diverse set of retail traders.
00:13:44
Speaker
That too tracks the Robinhood customers, twice as diverse as other financial services customers, ah more women, more minorities. i mean, it's a very, very amazingly good thing for the country. It's good policy and it's driven by the private sector. So selling that to policymakers you get better and better. And they're finally, I think, an acceptance. We've reached this sort of critical mass of understanding and appreciation for what we're doing.
00:14:10
Speaker
And that gives us the ability to help them do things that end up helping our customers and our business You know, that's a profound insight that I'm not sure people have picked up on, that by you know having a more diverse investing population strengthens capital formation. Absolutely. It's been a goal. I gave speeches when I was an SEC commissioner. Why don't we have more retail participation? Why isn't it more diverse? Why is why are these markets the markets for the millionaires?
00:14:37
Speaker
And here comes Robinhood, these two scrappy guys from Stanford, and they accomplished national policy all on their own. i tip my hat to them. They make my
Engaging in Regulatory Processes as Advisors
00:14:46
Speaker
job easy. That's great.
00:14:48
Speaker
Well, that's fantastic, Dan. Thank you so much for stopping by. We covered a lot of ground. So something that we like to do on this podcast is we like to leave our viewers with like something so they can take with them, an actionable piece of advice for their firm.
00:15:00
Speaker
So I'd love if you could share maybe something you're going to highlight on the stage. What's one piece of advice you'd give to advisors to to navigate the the current landscape? You know, so i would give the same advice when I was back in office at the SEC.
00:15:13
Speaker
Participate. Don't just assume that good things are gonna happen around you. Don't rely solely on your trade groups. Participate. Write a comment letter directly on your firm letterhead.
00:15:25
Speaker
ah have a meeting with your congressman or woman, ah you know, work with Trade PMR, who's now working with Robin Hood Advocacy to make sure we understand your issues. But don't sit back and let this stuff happen around you. Everyone's got a voice.
00:15:39
Speaker
And I have to tell you, when I was in office, if if a, you know, three-person RIA came in to meet with me, and told me about real issues that they're experiencing in a real day. That versus the value of a homogenized trade letter group. i mean it was gold.
00:15:55
Speaker
And it helped me make decisions on policy that were critical. Real details. so So participate. That's what I would say. That means your voice matters. So be sure you are really taking up arms to continue to educate Congress, and continue to educate the public in general. can only help.
00:16:11
Speaker
Absolutely. Thank you. Yeah, Dan, thank you for being here. We appreciate it. Thanks having guys. And thank you for everyone who listened wherever you got this podcast. ah If you can click like, subscribe, share, comment, heart, whatever the button is, please
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00:16:26
Speaker
click that. It helps the algorithm, helps get our podcast out there.
00:16:29
Speaker
And follow us on social media so you can catch the yeah next episode. That's right. Thanks, Ryan. And remember, with that next episode, we're going to bring you even more insights and actionable ideas to help you grow your business.
00:16:42
Speaker
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Please contact the provider for information about their terms and conditions as well as any fees that may apply.
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Speaker
If you want to join the conversation or connect with us, please visit us at synergizepodcast.com. This content is provided for general information purposes only. The views expressed by non-affiliated guest speakers are their own and do not necessarily reflect the opinion of Trade PMR or its affiliates.
00:19:42
Speaker
Trade PMR and its affiliates do not endorse any guest speakers or their companies and therefore give no assurances as to the quality of their products and services. This channel is not monitored by Trade PMR. Trade PMR does not provide investment advice, tax advice, or legal advice.
00:19:58
Speaker
Trade PMR is a member of FINRA and SIPC. Trade PMR Inc. is registered with the Securities and Exchange Commission, SEC, and the Municipal Securities Rulemaking Board, MSRB. Trade PMR provides brokerage and account services to registered investment advisors. Custodial services provided by First Clearing.
00:20:17
Speaker
First Clearing is a trade name used by Wells Fargo Clearing Services, LLC. Member SIPC, a registered broker dealer and non-bank affiliate of Wells Fargo and Company. Copyright 2025, Trade PMR Inc. For a transcript of this episode with sources, visit synergizedpodcast.com.