Breakaways

I was sitting in the airport awaiting my connection and couldn’t help but overhear the conversation between the very professional and successful looking woman next to me, and one of her coworkers. Of course, she was making little effort to keep her voice down. She and her colleague were having a lengthy, candid conversation about the apparent ineptitude and paranoid, self-serving actions taken by management of the company and one other unsuspecting co-worker.

These conversations take place in every type of money making endeavor in the United States and I’m sure, the world. But it took me back to my days as a producing Financial Advisor at a wirehouse. Actually, I was employed by two; there was little difference between them and these same conversations happened at both. Some Advisors would make the rounds during the day and spend wasteful time complaining about local management, upper management and of course the executive suite, who “undoubtedly had no experience or idea of what was going on in the field”. Funny enough, some would complain about the larger producers in the office too, but that’s fodder for another day.  Read More

…you looked at a broker dealer that is ready for the road ahead or your own succession plan!

A recent study reveals that nearly half of today’s financial advisors plan to leave the industry in the next few years. At the same time, fewer young professionals are entering the financial advisor profession each year. Succession plans are critical to ensure the continuity of the business for clients, employees and shareholders, or a payout for advisers or their heirs.

For Independent Advisors

With the average age of financial advisors being roughly mid-to-late 50’s,and more than half of whom are without a formal succession plan in place, there is a huge opportunity that exists for the next generation of financial advisors.  The question is, are you with the right broker dealer with the leverage, experience, and willingness to assist in seizing the opportunity?  In a recent industry report it was estimated that approximately 80% of the independent broker dealers that exist today are cash flow negative. With such a shocking statistic, will we see a consolidation of independent options that are out there?  If that statistic is true, what firms are properly positioned to help you with the purchase of soon-to-be ‘for sale’ practices?  Read More

It is not the first time it has crossed your mind. In fact, every time you ran into the immovable object known as your B/Ds compliance department, you nurtured impure thoughts about being somewhere else. Now for good reason or no reason at all, you consider flying off the perch and landing in unknown territory. Here are some things you need to think about before you cut loose. Remember the words of legendary country singer Charlie Pride:

“When I get done leavin’, I’ll be gone…”

1. Make The Leaving List

Why are you unhappy in your present situation. List the factors which lead to dissatisfaction. This is not the place to include anticipated positives. Concentrate on negatives only. Done right, your list will show why you are unhappy.  Read More

The idea of starting an RIA has become a recent fad for many financial advisors. Aside from being out of the watchful and sometimes over compliant eye of their broker dealer, being able to keep 100% of their fees and having  a custodian who will hold their client’s assets and accounts, processes their transactions, and provide billing and reporting services sounds like a win-win situation. But is it right for you and your business?

When considering the RIA option, there are 3 popular scenarios to consider. Ten to fifteen years ago most BDs did not have a corporate RIA (Registered Investment Advisory).  The regulatory hurdles to forming and running an independent RIA were low so advisors formed their own.  Today advisors form their own RIA basically to gain greater control—the management of assets in addition to financial planning.  In some cases a B/D will allow financial planning but not the management of assets under an independent RIA. If management of assets is allowed, a restriction of where the assets are custodied may be imposed, at the B/D’s custodian.  Read More

When we were kids, we learned reading, writing, and ‘rithmatic. As financial services professionals, we are now faced with rules, regs, and ‘rbitration. If you don’t pay attention to compliance, you will be forced into legal battle (arbitration or court judicial system) with your customers or even the regulators.

Are all the laws we have to abide by a good thing? Or are you concerned about over-regulation and regulatory reform? Here are some of the current issues that have our heads spinning:

• Regulatory reform was just signed into law July of this year. We await the rules that are sure to follow.
• Advisors need to adjust the ADV II to fit the new ADV 2 narrative style and ensure the document speaks plain English.
• Will BDs add the fiduciary moniker? Only time and the SEC will tell.
• Pay-to-play rules mean prohibiting payments to politicians.  Read More

By all accounts, 2009 was a tumultuous and challenging year throughout the financial services community. With competition for clients and assets increasing among advisers, those who were able to offer a broader array of products and services may have been better positioned to weather the storm.It has often been burdensome for advisers to offer both fee-based products and commission-based investment vehicles on the same platform. However, recent technological advances, coupled with clarity from regulators, have eased these burdens, paving the way for a new breed of adviser.

The dually registered or hybrid adviser is able to offer fee-based products to some customers and brokerage-based solutions to others while remaining within the confines of a seamless and consolidated environment. A hybrid adviser is registered with FINRA through an affiliated broker-dealer and with the Securities and Exchange Commission or state as a registered investment adviser.  Read More