Two Roads For Small B-Ds
June 1, 2015 By Dan Jamieson, Financial Advisor Smaller broker-dealers are facing two divergent paths. One path leads to a dead end, a route being followed by aging B-D owners who, faced with expanding regulatory costs, are looking to get out of the business. The other road, traveled by B-Ds looking to survive, offers opportunities to acquire advisors and assets from firms that exit the business. “The sad fact is that a lot [of small B-Ds] won’t be around in a few years because they don’t have the money” to keep up with compliance costs, says Joel Blumenschein, president of Freedom Investors Corp. in Brookfield, Wis., which has about 75 reps. The latest statistics from the Financial Industry Regulatory Authority show that the long-term decline among B-Ds continues. Through April, Finra had 4,040 member firms,...