Articles Written by Jon Henschen

How Super OSJs Bring Innovation to Broker-Dealers

23:50 28 May in Articles Written by Jon Henschen by rafferty

May 28, 2015 By Jon Henschen, as published on ThinkAdvisor   In an article published in the January 2006 issue of Investment Advisor Magazine, I wrote about how a Producer Group can extend the reach and profitability of a rep’s practice. In the past two years, we’ve seen exciting new value propositions coming from these producer groups. For those not familiar with producer groups, they are a large grouping of financial advisors (also called Super OSJs) that joins together with either a single OSJ (Officer of Supervisory Jurisdiction) or multiple OSJs within the group, with all advisors in the group tied to a single broker-dealer. In my 2006 article, I pointed out that when advisors join together they reap benefits beyond what they can get from the broker dealer alone: Scale that will bring more...

An Overlooked Benefit of Going Independent: Quality of Life

19:44 23 April in Articles Written by Jon Henschen by rafferty

April 23, 2015 ThinkAdvisor by Jon Henschen   In a recent article in Financial Advisor IQ, two reps that left Morgan Stanley, Brian Luts and David Greenleigh, discussed the benefits of moving from the wirehouse to Wells Fargo’s independent arm (FINET). “Our operating margins are still significantly better than when we worked as employees,” according to Luts, who also commented that he’s now netting about 70%. David Greenleigh noted that the higher margins allow his practice to work with fewer clients. “At Morgan Stanley, we would’ve had to more than double the number of people we served to reach our goals.” Luts’ and Greenleigh’s remarks point to a benefit of going independent that is rarely touted by the channel: making more with less and freeing up your time for a better quality of life. The Constant Push at...

Three Hidden Broker-Dealer Profit Centers Exposed

16:23 09 March in Articles Written by Jon Henschen by rafferty

From the March 2015 issue of Investment Advisor Magazine By Jon Henschen   As our industry pushes for greater transparency, one area that remains largely opaque is broker-dealer profit centers There's nothing wrong with broker-dealers being profitable, but how those profits are obtained could use a good dose of disclosure. Representatives deserve to know that what they are paying is a true cost and what they are receiving is the best possible commission from a vendor. First, let's look at the profit centers that are relatively obvious to reps. In addition to the spreads broker-dealers receive from payout grids, there are two other primary sources of broker-dealer profit: revenue sharing and markup. REVENUE SHARING BETWEEN BDS AND VENDORS Revenue sharing happens between the broker-dealer and the product vendors, so it's of little concern to reps. For example,...