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Author: rafferty

B of A Forces ‘Garden Leave’ on Brokers After Defection

00:00 01 February in In the News by rafferty

by Hugh Son and featured in Bloomberg
February, 2011:

Bank of America Corp., which lost a financial adviser with $5.9 billion in client assets to a rival in December, told some workers to sign agreements forcing them to go on reduced-pay “garden leave” if they plan to resign.

Employees of the bank’s U.S. Trust unit received the notice this week ahead of 2010 bonus payments and were told their continued employment hinged on agreeing to the new policy, said a person with knowledge of the correspondence. Advisers who previously could leave after two weeks notice now must remain for 60 days and are forbidden from soliciting clients for a total of eight months, according to a copy of the document.

“They’re sending the message,

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Wirehouse Waste vs. Independent Broker-Dealer Efficiency

00:00 01 January in Articles Written by Jon Henschen by rafferty

by Jonathan Henschen, CFS and featured in AdvisorBiz.com
January, 2011:

I received my introduction to the old school corporate structure through my father. After a long career as a partner with the accounting firm Price Waterhouse, dad finished his work life at Bethlehem Steel as one of their 11 vice presidents. The timeframe was 1978-1984, the declining years of Bethlehem Steel. Despite already decaying profits, the executive elite still lavished upon themselves as if the good times were still rolling. Here are a few examples:

Corporate Excess at its Finest

In some respects, Bethlehem Steel’s Boys Club style of management was similar to the television show “Mad Men” with a hierarchy of ego driven males smoking oversized cigars. For example, All of Bethlehem Steel’s upper management were members of the Saucon Valley Country Club,

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One Indie B-D’s New Twist on Compensation

00:00 01 January in In the News by rafferty

by Liz Skinner and featured in Investment News
January, 2011:

Beacon Financial Partners about a year ago realized that it was time for the growing advisory firm to move to a more sophisticated broker-dealer.
After interviewing independent-broker-dealer giants LPL Financial and Commonwealth Financial Network, the firm chose Capital Analysts Inc., a much smaller firm.

Part of the attraction was Capital Analysts’ novel compensation model, which is based on fees rather than commissions. Instead of the traditional method of taking a small percentage of what advisers sell, Capital Analysts gives advisers a 100% payout and charges an annual access fee.

That fee — which is $40,000 to $120,000 a year, based on revenue — covers the cost of custody, trading technology,

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