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Articles / Resources

Defying the Odds

16:25 19 November in In the News by rafferty

Rep, November 2012 by Diana Britton It’s orthodoxy that small IBDs won’t be able to stay in business given the unprecedented increase in regulatory and technology costs. Yet some tiny firms are bucking the trend. Here’s how they’re doing it. These days, broker/dealers are facing more challenges than ever. Let’s see. You’ve got your increased regulatory scrutiny from FINRA and the SEC; the fight for talent has never been more difficult; and profit margins, never fat in the independent b/d space, are under pressure. Not to sound hysterical, but many are questioning the sustainability of the small independent broker/dealer model. Will the small IBD have to mate (to achieve scale) or otherwise die? In a recent online poll conducted by WealthManagement.com, 62.5 percent of respondents (125) said the IBD business is not sustainable, compared to 37.5...

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DeWaay Financial closing its doors

16:58 13 November in In the News by rafferty

November 13, 2012 By Bruce Kelly, Investment News Broker-dealer known for troubled private placements files to deregister with SEC, Finra DeWaay Financial Network LLC is the latest broker-dealer to shut down because of the costly fallout of investor lawsuits stemming from high-risk private placements. The firm, which was known for its access to private deals, filed a form known as a “broker-dealer withdrawal” on Friday with the Financial Industry Regulatory Authority Inc., according to DeWaay’s profile on Finra's BrokerCheck. After filing a BDW, broker-dealers typically have two to three months to wind down their businesses. DeWaay Financial, based in Clive, Iowa, and owned by the formidable Iowa broker Donald DeWaay, is in a drawn-out battle with wealthy clients over failed real estate deals. DeWaay Financial built a large part of its reputation on selling alternative investments....

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6 Overlooked Criteria for Broker-Dealer Due Diligence

21:57 24 October in Articles Written by Jon Henschen by rafferty

November 2012 by Jon Henschen and featured in Investment Advisor When investigating a new broker-dealer, you may not be looking at the following criteria—but you should Illustrations by Shaw Nielsen It’s not surprising that when the majority of registered reps look to change their broker-dealer, they tend to focus on short-term factors and immediate satisfaction. Quick relief in the form of better technology and payout, ticket charges, expenses and transition support can be very attractive. However, focusing on the long-term benefits will go a lot further in securing a new broker-dealer relationship that will last. Here are six criteria worth investigating to help ensure that when you make a broker-dealer change, it’s the right one. 1. Check the firm’s profitability and financials. Since the 2008 market downturn, the bottom line comes down to, “Is the firm consistently profitable?” Average...

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Are Independents Here to Stay?

16:51 09 October in In the News by rafferty

October 4, 2012 by Diana Britton, Wealth Management.com Recruiting into the independent broker/dealer channel has not materialized as people thought this year, but new research from Cogent says that may soon change. While recruiters say the number of breakaway brokers going independent has slowed down this year, defying expectations, the pace may pick up soon. Twenty two percent of advisors are considering a move in the next two years, according to a recent report by Cogent Research. Their top choices of where to land? LPL Financial (43 percent are likely to consider it) and Raymond James Financial Services (40 percent). Potential breakaways are also considering Wells Fargo Advisors (36 percent), Ameriprise (30 percent), and Morgan Stanley Smith Barney (28 percent). Aite Group predicted that 2012 would be a landmark year in breakaway volume as the golden handcuffs loosen at the wirehouses. But recruiters say that movement...