How DOL Is Changing Sign-On Bonuses and Other Indie BD Procedures
June 13, 2017
By Jon Henschen, as published on ThinkAdvisor
A profitability shell game is going on, as profit centers such as ticket charge markups are sacrificed while advisory administration fees increase
The wirehouse channel is cutting back dramatically on upfront money offered to join their broker dealer. Also of note is the recent case of Merrill Lynch, which is trying to grow without offering traditional sign-on bonuses.
Both trends are a result of DOL rules, and DOL rules are having an impact on the independent broker-dealer channel, but not in ways you may think.
Of the 3,902 FINRA member firms (as tracked by Fishbowl Strategies in late February), approximately 25% offer some form of forgivable note (or sign-on bonus) to aid in the expenses and disruption of a broker dealer switch.