In the News

FINRA to Mull Broker Compensation Disclosure Rule

November 29, 2012,
by Melanie Waddell, AdvisorOne

Board will consider a number of potential rules and amendments at December meeting

The Financial Industry Regulatory Authority plans to consider at its Dec. 6 Board meeting several rule proposals and amendments, chief among them a proposal that would require broker-dealers to disclose to customers brokers’ compensation packages.

Securities lawyer Patrick Burns spoke out publicly in an October interview with AdvisorOne saying that he wants to change the status quo in broker compensation. “Our clients who are investment advisors would like to see the playing field leveled in terms of disclosures,” Burns told AdvisorOne at the time.

Burns, based in Beverly Hills, Calif., told AdvisorOne in that interview that unlike brokers, his RIA clients must disclose all forms of direct and indirect compensation and conflicts of interest,

Defying the Odds

Rep, November 2012
by Diana Britton

It’s orthodoxy that small IBDs won’t be able to stay in business given the unprecedented increase in regulatory and technology costs. Yet some tiny firms are bucking the trend. Here’s how they’re doing it.

These days, broker/dealers are facing more challenges than ever. Let’s see. You’ve got your increased regulatory scrutiny from FINRA and the SEC; the fight for talent has never been more difficult; and profit margins, never fat in the independent b/d space, are under pressure.

Not to sound hysterical, but many are questioning the sustainability of the small independent broker/dealer model. Will the small IBD have to mate (to achieve scale) or otherwise die? In a recent online poll conducted by WealthManagement.com,

DeWaay Financial closing its doors

November 13, 2012
By Bruce Kelly, Investment News

Broker-dealer known for troubled private placements files to deregister with SEC, Finra

DeWaay Financial Network LLC is the latest broker-dealer to shut down because of the costly fallout of investor lawsuits stemming from high-risk private placements. The firm, which was known for its access to private deals, filed a form known as a “broker-dealer withdrawal” on Friday with the Financial Industry Regulatory Authority Inc., according to DeWaay’s profile on Finra’s BrokerCheck.

After filing a BDW, broker-dealers typically have two to three months to wind down their businesses.

DeWaay Financial, based in Clive, Iowa, and owned by the formidable Iowa broker Donald DeWaay, is in a drawn-out battle with wealthy clients over failed real estate deals.