Nuisance Fines are Hurting Small B-Ds and Driving Consolidation, Warn Experts
March 11, 2019 By Mrinalini Krishna, Financial Advisor IQ Regulatory and compliance asks are hurting smaller broker-dealers — typically those with fewer than 100-150 representatives — and forcing some of them to roll up into larger firms, warns Frank LaRosa, founder and CEO of Moorestown, N.J.-based Elite Consulting Partners. “Smaller broker-dealers are being strangled with the increased burden of Finra oversight. And both Finra and the SEC are coming down with more and more penalties for nuisance issues, which is really squeezing broker-dealers essentially out of the business. And what they're doing is they're rolling up,” LaRosa says. LaRosa says his team worked on several transactions last year and is currently working on a few such deals. While LaRosa is not saying regulators are going after small broker-dealers in particular, he does say the scale...
