Author: rafferty

Making Sense of the Nonsensical Broker Comp Rule

by Jon Henschen
September 18, 2013 featured on ThinkAdvisor

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,

E&O Insurance: Cost and Deductibles Skyrocket

August 30, 2013
by Jon Henschen, featured on ThinkAdvisor

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,