“The independent broker-dealer space has all the elements of a high-adventure video game this year, and only the most advanced players may be up for the challenge.”
Anticipating and navigating regulations is growing more daunting, while shrewder strategies are needed to prevent profits from imploding under mounting costs. B-Ds must also have quicker reflexes to gobble up and retain financial advisors who can help score revenues for the firms.
Fa-mag.com’s “Ramping Up the Game” by Jerilyn Bier gives an in-depth look at what’s ahead. “Independent B-Ds are trying to squeeze out net profit margins in the 5% to 8% range…”
“ If new regulations require firms to add technology and compliance people, they will likely have to eat these costs because it’s hard to cut advisors’ pay without losing them” says Jodie Papike, an executive vice president at Cross-Search.
The majority of firms are providing financial advisors with 85% to 91% payouts, according to Financial Advisor’s 2013 B-D Ranking survey. See full report.