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Articles Written by Jon Henschen

Broker/Dealer Expenses

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

by Jonathan Henschen, CFS and featured in ProducersWeb
July, 2006

We get deluged by questions about fees Advisors are paying, looking for references to what is normal for them to be paying on a particular expense imposed by their broker/dealer. To be certain, there are some firms that are not reasonable on what they charge; approaching ugly on the scale of what is fare to charge an Advisor. We’ve put together a list of common expenses incurred by Advisors by Independent Broker/Dealers as a reference to what is average in our industry and what the trends for these expenses are evolving toward.

Errors & Omissions Insurance

We’ve all seen a substantial spike up on E&O costs over the last four years. The good news is these costs are finally stabilizing,

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Outsourcing – Ways to Cut Overhead Expenses

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

by Jonathan Henschen, CFS and featured in Producers Web
June, 2006:

It’s not uncommon for me to run into advisors who are paying up to five salaried assistants, and whose production is down around $500,000 in Gross Dealer Concession–their total net revenues from commission product sales and fee-based income. That’s a lot of overhead eroding what these advisors are actually netting at the end of the year!

Even though our industry thinks almost exclusively in terms of “GDC,” an advisor’s “net revenues” are the true benchmarks of success. That means, the lower the cost of doing business, the more profitable the advisor! To prove my point, I recently began making highly profitable use of the outsourcing resources described here. As a result, my modest little experiment has reduced my business overhead.

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The Top 5 Reasons Advisors Change Broker-Dealers

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

by Jonathan Henschen, CFS and featured in Producers Web
April, 2006:

Changing broker/dealers is a choice of last resort. Just the thought of it can cause an advisor’s guts to churn. For an advisor even to consider changing broker/dealers means that the pain threshold has reached disturbingly high levels. The causes of this pain are many, but here in descending order are what I’ve found to be the top five reasons advisors find it necessary to make that decision.

1. Unhappy in their current relationship

Frequently, relationship issues are caused by consolidation of insurance companies and banks, where significant management changes have altered advisors’ home office contacts. For example, when an insurance company buys your broker/dealer, you’ll experience a six-month to one-year honeymoon period where things are left alone while the new owners decide what they want to do with the broker/dealer.

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