Welcome to New York: New York Full Service Investment Firm Acquires Broker Dealer Firm

Posted on by admin
New York

Brokerdealer.com blog update profiles the acquistion of Kansas broker dealer firm, VSR Group, by New York investment firm, RCS Capital Corp. Brokerdealer.com’s update is courtesy of Kansas City Business Journal’s 12 March article, NY company finalizes acquisition of OP broker-dealer firm”. The article from Kansas City Business Journal is below:

New York-based RCS Capital Corp. has finalized its acquisition of Overland Park-based VSR Group and its wholly owned subsidiary VSR Financial Services Inc.

RCS, a full-service investment firm, said VSR adds $12.3 billion in assets under administration and 264 independent financial advisers to the Cetera Financial Group platform.

“We believe VSR is positioned to contribute value to our network of firms, and we are excited to begin our partnership with VSR’s leadership team to bring industry-leading platforms and tools to their financial advisers,” Cetera Financial CEO Lawrence Roth said in a release. “The firm adds a strong family culture which complements the individual cultures of the existing Cetera Financial Group firms. VSR has an established presence, predominantly in the Midwest, and we look forward to working with their advisors to bring customized financial solutions to the growing number of Americans looking for independent financial advice.”

VSR, a broker-dealer firm, was founded more than 30 years ago and is the second-largest broker-dealer domiciled in Kansas.

For the original article from the Kansas City Business Journal, click here.

UBS Employees Become Members Of NYC “Sexual Elite” Networking Club

Posted on by admin
UBS

Brokerdealer.com blog update courtesy of DealBreaker’s Bess Levin and for many clients, this story could be a deal breaker. UBS, a Swiss global financial services company with its headquarters in Basel and Zürich, Switzerland, UBS is operating in more than 50 countries with about 60,000 employees around the world, as of 2014. Some of these 60,000 employees have decided to attend a “sex club” in New York City. Below is an extraction from DealBreaker

Have you spent a good deal of time gazing upon your coworkers and thinking, “Working alongside each other is nice. Watching them scarf down Seamless has its perks. Burning the midnight oil to get these pitchbooks done is more fun than you’d think. But what I’d really like to do is attend a sex party with these people. But not just any old sex party put together in a slapdash manner and attended by people who give bondage gear a bad name. I’m talking a highly organized sex party produced by pros who know what they’re doing. Maybe someone with a British accent, who only has a couple degrees of separation from the Queen of England, and can lend an air of class to the event and know how to make a decent cup of Earl Grey. Someone whose roster of clients include the crème de la crème of f*cking. Someone who is not just a sex party planner but a serious businesswoman who did 7-figures in revenue last year by providing “A-list actors, British aristocrats, Formula One owners, moneyed married couples” and banking heirs with a smorgasbord of sexual delicacies”? Then today’s your lucky day.

Leggy models in Christian Louboutin heels and Wolford stockings glide from room to candlelit room. A dapper man in a custom suit eyes them while sipping Champagne by the mansion’s fireplace. A DJ plays in a corner. Oysters are slurped at the bar. And then, in a matter of minutes, pants are off, bras are unhooked and a tangled web of nude revelers go at it on a bed plopped smack in the middle of the 12,000-square-foot home. It’s just another night at Killing Kittens — the roving members-only sex club that professes to be “the world’s network for the sexual elite.” On Saturday night, the kinky London-based club makes its New York debut. For $100 per woman and $250 per couple, the adventurous can spend hours sleeping with strangers in a swanky Flatiron loft rented for the evening. Cocktail attire and masks are required (though, needless to say, both will get shed rather quickly)…

“When [my ex-boyfriend and I] hosted a party at our house [in London], we had a bed and there were these two gorgeous silver foxes and this black girl whose legs went to Tokyo, and she was just demanding everything from them . . . it’s complete carnage,” she says. “It’s like a buffet.” […As of Tuesday, Sayle says 60 people have signed up for the NYC event, including a group of British female bankers who work at UBS’s Midtown office and a bevy of models. “They all have the same mentality,” a raspy-voiced Sayle says of her members.” They’re all overachievers.

For the entire article from DealBreaker, click here.

 

BrokerDealer Compensation: Re-Visiting Retention Contracts; Advisor Advisory

Posted on by admin
retention advisor contracts

BrokerDealer.com blog update profiling the topic of compensation agreements between brokerdealers and respective financial advisors operating under BD umbrellas is courtesy of extract from 10 Mar article in BankInvestmentConsultant.com

With many long-term retention contracts expiring, wirehouses are under pressure to once again ensure the retention of their top producers. Kenton Shirk, associate director at Cerulli Associates, discusses how management is leveraging deferred comp to stem defections.

What are the latest triggers resulting in advisor moves?

A change dictated by B-D leadership may cause advisors to switch firms, especially if advisors feel their net financial benefits have decreased or their employer is rigidly dictating undesirable new policies. Industry recruiters have told Cerulli that continuous changes to comp structures also have left some advisors feeling they need to work harder to earn the same amount of money. Competitors can use this point of frustration to their advantage when recruiting advisors.

Describe the pros and cons when firms overreach, in terms of comp. 

B-Ds need to weigh the strategic benefits of a new comp strategy with the potential impact on advisor satisfaction.

An example is Merrill Lynch’s introduction of relationship pricing in its Merrill One platform in which a client’s fee considers the total financial relationship with both Merrill Lynch and Bank of America. Over the long term, it makes investor relationships stickier since they might be disinclined to follow an advisor to a competing firm since it means giving up discounts across their wealth management and banking accounts.

Yet in the short term, established advisors could potentially feel their parent firm is requiring pricing discounts they might not otherwise offer, creating a sense of frustration.

Will cutting the comp on smaller clients be significant enough to impact retention?

Continue reading →

Investors’ Anticipation Grows As They Wait For Tadawul To Become Public

Posted on by admin
TDFXnewoffices

Brokerdealer.com blog update profiles the much anticipated wait for the Tadawul market to foriegn investors. The Tadawul market is the Saudi stock market that has always been closed off to foreign investors. Much speculation has led many investors to believe that Tadawul should open by April. The update is from Institutional Investors, and here is a snippet from their article:

Anticipation is growing that a long awaited opening of Tadawul, the Saudi stock market, to foreign investors will come as early as next month. Analysts believe the move will provide fresh momentum for the $500 billion market, which has risen by nearly 30 percent since mid-December. “This will be the event of the year in emerging markets,” says John Sfakianakis, a veteran economist and investment strategist in Riyadh who opened an office there in September for the London-based emerging markets specialist Ashmore Group.

Oil was trading at more than $100 a barrel in July when the government first announced its intention to open the market at some point in 2015. Since then the Tadawul has been on a roller coaster ride, hitting a peak of 11,149 in early September, then plunging more than 34 percent over the next three months as oil prices collapsed before staging a recovery. The partial rebound of oil prices since January has helped. So has the government’s ability to draw on its $750 billion in reserves, which has helped keep the economy flush.

Growth has slowed but remains positive. The International Monetary Fund projects that the economy will expand by 2.8 percent this year, down from 3.6 percent in 2014. Nonoil sectors, which account for virtually the entire stock market, should expand by 5 percent, says Bassel Khatoun, Franklin Templeton’s head of equities for the Middle East and North Africa, based in Dubai.

To read the full article from Institutional Investors on the Saudi Arabian stock market’s opening, click here.

Push For More Transparency Exposes Broker-Dealer Profit Centers

Posted on by admin
download (10)

Brokerdealer.com blog update is courtesy of Think Advisor. With a push for more transparency in the brokerdealer industry, profit centers are being exposed.  

There’s nothing wrong with broker-dealers being profitable, but how those profits are obtained could use a good dose of disclosure. Representatives deserve to know that what they are paying is a true cost and what they are receiving is the best possible commission from a vendor.

First, let’s look at the profit centers that are relatively obvious to reps. In addition to the spreads broker-dealers receive from payout grids, there are two other primary sources of broker-dealer profit: revenue sharing and markup.

REVENUE SHARING BETWEEN BDS AND VENDORS

Revenue sharing happens between the broker-dealer and the product vendors, so it’s of little concern to reps. For example, on mutual funds and variable annuities, broker-dealers will negotiate with vendors to earn basis points (bps) on assets or sales of products their reps sell.

Broker-dealers will typically make 1 to 10 bps on either assets or sales of products, with small firms making only 1 or 2 bps and larger firms making 8 or more. Larger firms also have the ability to make these basis points on both assets and sales as they leverage their scale to obtain more.

On REITs and alternative investments, BDs earn between 1% and 1.5% extra in commissions on those product sales, which is called “marketing reallowance.” You may have noticed the increasingly large REIT and alts presence at BD conferences over the last five years—it’s simply because these vendors are currently willing to spend more to get in front of reps.

MARKUP CHARGES ON CLEARING FIRM COSTS

Markups, such as ticket charges, are something that representatives recognize as a profit center when they look at their various costs and see that firms differ on what they charge for them. It may not be apparent how much the markups are, or how extensively the costs incorporate overall costs, but reps recognize that there is a spread between clearing firms’ costs and what broker-dealers charge the representative.

For example, a clearing firm commonly charges $1 for postage and handling fees, and the broker-dealer charges between $4 and $7. A stock ticket charge from the clearing firm may be $9, but they charge the rep $19. BD scale is a primary factor in how low a firm is able to negotiate with the clearing firm: Small broker-dealers may be able to negotiate perhaps $12 from the clearing firm on stock ticket charges, while a large broker-dealer can negotiate down to $5.

For the rest of the article on ThinkAdvisor, click here.