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Three Hidden Broker-Dealer Profit Centers Exposed

16:23 09 March in Articles Written by Jon Henschen by rafferty

From the March 2015 issue of Investment Advisor Magazine By Jon Henschen   As our industry pushes for greater transparency, one area that remains largely opaque is broker-dealer profit centers There's nothing wrong with broker-dealers being profitable, but how those profits are obtained could use a good dose of disclosure. Representatives deserve to know that what they are paying is a true cost and what they are receiving is the best possible commission from a vendor. First, let's look at the profit centers that are relatively obvious to reps. In addition to the spreads broker-dealers receive from payout grids, there are two other primary sources of broker-dealer profit: revenue sharing and markup. REVENUE SHARING BETWEEN BDS AND VENDORS Revenue sharing happens between the broker-dealer and the product vendors, so it's of little concern to reps. For example,...

Financial Advisor IQ a Financial Times Service

Can a Site Built on Broker Rumors Make Money?

16:51 03 March in In the News by rafferty

March 3 , 2015 By Joan Warner, Financial Advisor IQ   The website Josh Brown has called “the most important site in finance” may finally be able to monetize its popularity. When AdvisorHUB made its debut in January 2014, founder Andrew Parish expected readers would pay a modest subscription fee to get the gory details of recent broker recruiting deals. Underwhelmed by the number of people who initially signed up, Parish — who has done time as both an FA and a headhunter — made the site free and created a “rumors” feature, where advisors and their bosses can submit anonymous comments and rants. Readership quickly exploded. AdvisorHUB now has 256,000 registered subscribers, according to Parish, and monthly unique page views hit 601,000 in February. Just 11 people produce the site, working out of Columbus, Ohio, and a...

Financial Advisor IQ a Financial Times Service

Wells Fargo’s Indie Channel Growing Faster Than Captives

17:25 19 February in In the News by rafferty

February 15, 2015 By Murray Coleman, Financial Advisor IQ   After working more than 35 years at Merrill Lynch, advisor Don O’Neal decided in early 2013 to make a switch. Along with his longtime partner, Teresa Brokaw, he packed up and joined a rival wirehouse. But instead of becoming a captive broker, the pair signed up with the Wells Fargo Advisors Financial Network, or FiNet, the firm’s independent channel. “It gave us the best of both worlds,” says O’Neal, whose practice manages $175 million and is based in Lynwood, Wash. “We own the business and our clients, but we still get support from Wells Fargo for back-office and investment platforms that are similar to what we’ve used in the past.” Their story isn’t unique. WFA says the head count at FiNet rose by 3% last year, to 1,254 advisors. Assets under...

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Another Key Executive Departs LPL

16:56 26 January in In the News by rafferty

January 23, 2015 Bruce Kelly, Investment News James Sorey, LPL's top East Coast recruiter, is leaving for another broker-dealer LPL Financial's top recruiter on the East Coast, James Sorey, left the firm earlier this month, continuing a brain drain at the nation's largest independent broker-dealer. Mr. Sorey was senior vice president, East region manager, for LPL. He was based in Charlotte and reported to LPL's head of recruiting, executive vice president Steve Pirigyi. “We wish James well,” said LPL spokesman Brett Weinberg, who declined to comment further about Mr. Sorey's potential replacement. Mr. Sorey is expected to take a position in February at an insurance company owned broker-dealer, Lincoln Financial Network, according to an industry source who asked not to be named. “We have no comment at this time,” said Lincoln Financial Group spokesman Eric Samansky. LPL Financial...