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With IBD Business Model Threatened, Who Wants to Buy One?

19:27 17 December in In the News by rafferty

December 17, 2015 By Janet Levaux, ThinkAdvisor With talk of the possible sale of the AIG Advisor Group and Cetera, insiders share their views on the state of indie brokerage business As billionaire investor Carl Icahn pressures AIG to break up its different parts, speculation continues as to which firm might purchase the AIG Advisor Group, which includes the independent broker-dealers FSC Securities, Royal Alliance, SagePoint Financial and Woodbury Financial. Meanwhile, the Cetera Financial Group of IBDs, which Lightyear Capital sold to now-troubled RCS Capital for $1.15 billion in 2014, appears to be on the auction block as well. But does buying a group of IBDs make sense in the current economic and regulatory climate? “I think the traditional IBD model is under threat,” said Chip Roame, head of the consultancy Tiburon Strategic Advisors, in...

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John Hancock’s IBD Looks to Cut More Deals Next Year

16:13 15 December in In the News by rafferty

December 15, 2015 By Murray Coleman, Financial Advisor IQ   As more insurance companies move away from acting as independent broker-dealers to focus on core financial products, one big industry name going in the opposite direction is John Hancock Financial. Executives of Hancock’s independent broker-dealer, Signator Investors, say they see the coming year as an opportunity to pump up mergers and acquisitions in wealth-management. “We expect consolidation in the independent IBD marketplace to continue into 2016,” says Brian Heapps, John Hancock Financial’s president. As more big carriers look to refocus on insurance, he adds, “we’ll be looking with an opportunistic eye on expanding our presence with advisors across the U.S.” Hancock rebranded its IBD two years ago to separate itself from the firm’s largely proprietary and insurance-based platform. Along those lines, the 1,500-strong network of independent advisors last month agreed...

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4 Factors That May Cause a Flood of Broker-Dealer Sales

17:40 07 December in Articles Written by Jon Henschen by rafferty

December 4, 2015 By Jon Henschen, as featured on ThinkAdvisor   With 9,500 Cetera Financial Group reps, 470 NEXT Financial Group reps and 4,925 AIG Advisor Group reps looking to “get bought,” we may be headed for a floodtide of broker-dealer sales as prospects for their future profitability fade. The current motives to sell are unique to these particular firms, with Cetera needing to either partially or fully sell its broker-dealers to generate revenue to cover its debt load, activist investor Carl Icahn wanting AIG to split up into three entities and focus on core business while NEXT Financial, a rep-owned broker-dealer, is looking for a liquidity event. When firms look out over the next five years, many may determine that the risk-reward model has the risks pulling ahead, with the question becoming not whether they...

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SEC Agrees to FINRA’s BrokerCheck Change on Posting Firings

00:23 02 December in In the News by rafferty

December 1, 2015 By Melanie Waddell, ThinkAdvisor   FINRA will reduce from 15 days to three the release of disclosure information filed on Form U5 The Securities and Exchange Commission approved Monday the Financial Industry Regulatory Authority’s plan to reduce from 15 days to three the release of disclosure information filed on Form U5 through BrokerCheck. Firms use Form U5 to terminate broker registrations with self-regulatory organizations and the states. Most of the information that FINRA releases through BrokerCheck generally is made available the day after it is filed with the Central Registration Depository system. FINRA’s Rule 8312, however — which governs the information FINRA releases to the public via BrokerCheck — provided for a 15-day delay in disclosing terminations. The 15-day waiting period, according to FINRA, was established to give brokers on whose behalf the Form U5...