Displaying items by tag: brokers

(New York)

As inflammatory as it may sound, most of the time media coverage on annuities does not speak the whole truth about why advisors often have a negative opinion of annuities. Of course, there are quite legitimate reasons like higher fees and the possibility of an esoteric product not being a good deal for what a specific retiree actually needs. However, when you get down to it, fee-based advisors have a significant financial incentive to dislike annuities. That incentive? It is that the advisor will not earn fees on the assets in an annuity, which means a client buying one can take recurring revenue out of an advisor’s pocket.


FINSUM: There are legitimate issues with annuities—including bad sales practices in the past—but when you realize this simple fact, it doubly reminds one why brokers sell 99.9% of annuities.

Published in Wealth Management

(Washington)

Brokers, those that are dually-registered, pretty much anyone covered by Reg BI, you should be on the lookout for a pending crackdown by the new Biden administration-led SEC…see the full story on our partner Magnifi’s site

Published in Wealth Management

(Washington)

Brokers, advisors, anyone covered by Reg BI, look out for a crackdown by the SEC. Former chief of FINRA, Susan Schroeder, says that enforcement is likely to start soon (i.e. this year) and may be “very aggressive”. According to Schroeder, “Early enforcement actions will be predicated on things like policies and procedures, but by past SEC standards, that is very aggressive”, and if the enforcement actions “are predicated on things like inadequate training or failures to have policies and procedures, from a legal theory perspective, that’s aggressive”.


FINSUM: So any way you cut it, SEC enforcement of the DOL rule this year looks like it is going to be intense. Brokers beware.

Published in Wealth Management
Friday, 07 February 2020 09:58

LPL Debuts the Employee Broker Model

(New York)

LPL, the largest independent broker-dealer out there, is debuting what seems a curious new model to some. It is making some brokers employees of the firm, completely breaking the mold of the entrepreneurial independent broker running his own office. The firm says it is trying to offer as many good options as it can to make recruits happy and excited about joining LPL. Employees will get a lower payout but better overall benefits. LPL may start to offer attractive bonuses to recruit brokers who want to be/stay employees.


FINSUM: This makes perfect sense to us from a recruiting perspective. There are likely plenty of brokers out there who like their job job but want more stability. This seems like a good compromise.

Published in Wealth Management

New York)

Yesterday we ran a piece explaining the level of AUM advisors need to successfully breakaway (cheat sheet: $50m-$100m). Today, we wanted to hit on another key topic: what percentage of clients typically come with an advisor when they break away? Now, this obviously varies a great deal based on particular circumstances, but according to Kestra, the typical rate is 80% in their experience.


FINSUM: This is useful, but only to a point because many advisors will have a great deal of their assets concentrated in a small group of clients, meaning it is a fairly tight number of make or break accounts.

Published in Wealth Management
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