Articles / Resources

FINRA Broker Bonus Plan Would Be ‘Nonevent’ for Many Reps: Henschen

16:25 20 September in In the News by rafferty

September 19, 2013 by Melanie Waddell, ThinkAdvisor Measure would require reporting of payments $100,000 or more The Financial Industry Regulatory Authority announced Thursday that its Board of Governors approved a proposal requiring brokers to disclose recruitment compensation paid to them as an incentive to move to a new firm. The regulator raised the threshold of payments that would need to be reported. The rule would apply to recruitment compensation — including signing bonuses, up-front or back-end bonuses, loans, accelerated payouts, and transition assistance — of $100,000 or more, and to future payments (trade-based or asset-based) contingent on performance criteria. The proposal will be submitted to the Securities and Exchange Commission for review and approval. The SEC could then put the proposal out for public comment or approve it. If ultimately approved, brokers would need to disclose their recruitment compensation to any...

Making Sense of the Nonsensical Broker Comp Rule

18:37 18 September in Articles Written by Jon Henschen by rafferty

by Jon Henschen September 18, 2013 featured on ThinkAdvisor New rule inequitable for independent BDs For advisors changing broker-dealers, financial assistance in the form of forgivable loans is standard procedure for regional broker-dealers and wirehouses, but less common in the independent channel. Wirehouses commonly offer up to 300% of trailing 12 months’ production. In the independent channel, for those firms that even offer forgivable notes, the amounts are typically in the range of 10% to 20% of trailing 12 months’ production. The new disclosure rule will not apply to incentives totaling less than $50,000. While that figure might look reasonable at first glance, applying a static amount as a guideline fails to differentiate between large and small producers. For example, in the independent channel, forgivable note money is intended to cover initial transition expenses and...

Roth’s Exit From Advisor Group: ‘A Big Deal’

21:22 06 September in In the News by rafferty

September 6, 2013 by Janet Levaux, ThinkAdvisor Experts say Larry Roth’s departure creates a void for the IBD network News that the Larry Roth, who has led the Advisor Group of 6,000 independent reps for the past six years, is set to be CEO of Nicholas Schorsch's Realty Capital Securities on Monday has raised eyebrows and questions for broker-dealer recruiters and other experts. Peter Harbeck is serving as interim president and CEO of the Advisor Group, which includes the IBDs Royal Alliance, FSC Securities, SagePoint Financial and Woodbury Financial. Chip Roame, head of Tiburon Strategic Advisors, agrees. “Larry did a terrific job leading Advisor Group through the AIG crisis and rebuilding it afterward,” he said. “It would be difficult to rate his performance other than an A.” Losing such an “A-level” executive is tough in any business,...

E&O Insurance: Cost and Deductibles Skyrocket

20:51 04 September in Articles Written by Jon Henschen by rafferty

August 30, 2013 by Jon Henschen, featured on ThinkAdvisor Reps get less for more in this era of Dodd-Frank reform The days of $1,500 errors and omissions insurance with a $5,000 deductible are quickly coming to an end. Today, it’s more typical to see annual policy costs in the $3,000-$4,000 range, with deductibles running as high as $350,000. Reasons for the increases vary, as Jim Eccleston, president of Eccleston Law Offices, explains. “Regulatory actions and arbitration claim filings are increasing,” Eccleston argues. “Arbitrations claims may be ‘group’ type claims involving multiple investors and may involve products sold to numerous investors. And product-based class-action filings alleging lack of due diligence are increasing as well.” Jodee Rager, chief compliance officer at Geneos Wealth Management, believes that securities attorneys are a primary cause of the current E&O insurance dilemma. “Attorneys...