Displaying items by tag: RIAs

Wednesday, 31 January 2018 10:42

Independents are Taking Billions from Wirehouses

(New York)

If you need some more information to understand why the big wirehouses are trying to pull out of the broker protocol, this is it. In 2017, independent broker-dealers snagged 118 wirehouse teams and took almost $28 bn in AUM, up 23% from 2016. The success comes as independents have closed the technology and product gaps with larger rivals, and IPO allotments have become scarce at wirehouses.


FINSUM: Wirehouses are generally growing fearful and are trying to throw up hurdles that keep brokers from breaking away. Hence the pullout from the broker protocol.

Published in Wealth Management
Wednesday, 17 January 2018 10:51

RIAs On Mission to Expand Tax Loophole

(Washington)

RIAs are furious about one aspect of the broader tax package passed last month. That is the way the government puts limits on the amount of income and type of entity that can use the new lower tax rate for pass through entities. RIAs say the new rules discriminate against RIAs that are not set up as C Corps. There is already a major movement to get the rule changed being led by Savant Capital Management. “We believe RIAs deserve the same tax treatment as other business owners” says TD Ameritrade.


FINSUM: We noticed before the new package got passed that it seemed to very deliberately exclude some sectors. Hard to judge the chances of this push succeeding.

Published in Wealth Management
Tuesday, 16 January 2018 12:17

FINRA Wants to Free Hybrid RIAs

(New York)

If you are a hybrid BD/RIA, you need to pay attention. FINRA is trying to loosen the strictures in which you might find yourself. In particular, FINRA wants to make changes to its outside business activity rule. It no longer wants to force hybrid B-Ds to have compliance tracking for their RIA businesses. Being legally liable for such businesses can prove a major cost burden. “The motive for taking a percentage payout on the RIAs advisory business will go away”, says one industry insider.


FINSUM: This will certainly be a welcome change for the many hybrid RIAs who deal with the current FINRA rule.

Published in Wealth Management
Wednesday, 10 January 2018 10:39

FINRA Puts Out New Warning to Advisors

(New York)

Advisors keep your eyes open, FINRA has put out a new warning on what not to do. The regulator says that dually-registered advisors need to be very careful when moving client funds from a brokerage to an advisory account. FINRA explains best, saying “Finra will review situations in which registered representatives recommend a switch from a brokerage account where that switch clearly disadvantages the customer … such as where the registered representative recommended that the customer purchase a securities product subject to a front-end sales charge in a brokerage account and then shortly thereafter recommended that account be transferred to a fee-based account”.


FINSUM: This is sort of a suitability/fiduciary rule hybrid type of enforcement. We thought all advisors should be aware that FINRA is on the lookout for this.

Published in Wealth Management
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