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100% Advisory Payouts & 7 Other ‘Heresies’

17:26 29 June in Articles Written by Jon Henschen by rafferty

June 28, 2017 By Jon Henschen, as published on ThinkAdvisor Advisors take note: Many sacred cow profit centers being disrupted by broker-dealers promoting “loss leaders” to prospects There is a mad scramble going on as new DOL rules erode once reliable sources of independent broker-dealer revenue. Shifting or creating new profit centers is becoming an obsession for broker-dealers. For some, it’s a matter of survival. For others, such as private-equity owned broker-dealers, getting profits up to a level that will make the broker-dealer attractive for an aggressive sale price is the prime motivation. New DOL rules are also causing broker-dealers to implement more conservative compliance policies that many advisors find too restrictive. For firms that buck the trend, they are quickly shot down with an almost religious fervor. An example of this is the 100% advisory...

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How DOL Is Changing Sign-On Bonuses and Other Indie BD Procedures

15:29 16 June in Articles Written by Jon Henschen by rafferty

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. Much of this is...