Flipping Burgers On Main Street v. Becoming a BrokerDealer on Wall Street: Glassdoor Survey Says:

Posted on January 30, 2015 by admin

Brokerdealer.com blog update profiling recent study from job review site Glassdoor.com is courtesy of extract from eFinancialCareers.com with reporting by Beecher Tuttle.

People would rather work at In-N-Out Burger Than in Banking

Ok. That headline contains just a twinge of hyperbole. But the latest employer rankings show that Wall Street still has a ways to go in terms of improving its reputation and keeping workers happy.

Job review website Glassdoor recently came out with its Top 50 Places to Work, and not a single bank made the list. Now, you could make the argument that the hours required to make it on Wall Street would likely eliminate banks from contention, but several consulting firms made this year’s list. Consultants put in plenty of hours themselves and often have brutal travel schedules, yet they’re represented extremely well.

Bain finished second on the list, just behind Google, with a 4.4 rating (out of 5). Meanwhile, Boston Consulting Group finished 5th, just a few spots ahead of fellow consulting firm McKinsey, which at nine was nipped by In-N-Out Burger, known for its “fast-paced team environment.” So that’s three out of the top 10 for consulting, trumping every other industry, including tech.

Really, it shouldn’t come as that big of a surprise. Vault.com, which uses employee reviews to rank banks, accounting firms and consulting companies, reported similar rankings in consulting, with Bain, McKinsey and BCG topping the list. But as an industry, consulting took banks and accounting firms to the woodshed. McKinsey, the top ranked consulting firm, finished more than a full point above the highest-ranked accounting firm, PricewaterhouseCoopers, and seven-tenths of a point ahead of J.P. Morgan, the top-ranked bank.

Maybe the reviews are accurate and quantify a true measure of happiness. Or it could be that bankers are chronic complainers, no matter what the reality. A separate study found that bankers are just as satisfied in their careers as tech executives yet they were twice as likely to complain about their compensation, despite making more.

For the record, Goldman Sachs finished highest among the six biggest U.S. banks in Glassdoor’s survey, earning a score of 3.7. Morgan Stanley ended with a 3.6, J.P. Morgan a 3.5, Bank of America and Citigroup each received a 3.3, and Wells Fargo trailed the group with a 3.2.

Another BrokerDealer-Only Bond Trading Platform: RVQB

Posted on January 29, 2015 by admin

B RVQB brokerdealer only bond trading platform rokerdealer.com blog update courtesy of extract from Traders Magazine, one of the sell-side’s top publications.

Quantitative Brokers and RiskVal have formed a partnership to create and deliver a fixed income trading platform, called RVQB.

The new sellside bond trading platform “combines powerful real-time analytics with seamless access to QB algorithms for best execution,” according to a press statement. Quantitative Brokers is a provider of agency algorithms for fixed income and futures markets. RiskVal Financial Solutions is a trading analytics and real-time risk management provider.

The RVQB platform integrates QB algorithms and RiskVal trading analytics and aims “to provide traders with real-time control and transparency into their outright and relative value executions.” The solution provides the bond trader with screens that can route orders to Legger, QB’s multi-leg execution strategy, for basis and relative value trading. During a demonstration of the trading platform in Manhattan yesterday, a bond trader can fill in a single trade with reduced keystrokes and data entry.

QB’s Legger algorithm executes user-defined structures with any ratio and number of legs across cash US Treasury and futures markets. A transactional cost analysis report is generated for each execution, providing full post-trade transparency on the order and slippage performance.

“Fixed income traders are continually looking for better ways to actively manage their enterprise-wide risk,” said Christian Hauff, CEO and co-founder of QB. “By marrying QB’s best execution algorithms with RiskVal’s proven relative value analytics, we have created a unique platform that integrates powerful trade discovery with superior execution tools.”

“The fixed income markets are rapidly evolving, and traders are seeking access to smarter and more transparent execution,” said Jordan Hu, founder and CEO of RiskVal. “As the market structure evolution continues, we are excited to address some of the key issues that fixed income traders face in the move to a more electronically-driven model.”

In 2014, both FINRA and the SEC approved QB as a broker-dealer for government securities.

Domo Arigato, Mr. Roboto: Cambridge to offer robo-offering in 2016

Posted on January 29, 2015 by admin

Brokerdealer.com blog update courtesy of InvestmentNews’ Bruce Kelly.

Independent broker-dealer, Cambridge Investment Research Inc. announced plans to have a competitive robo-type offering that works in sync with its 3,000 advisers’ practices in 2016. It is the independent broker-dealer’s aim to incorporate an online advice platform as a tool for reps.

“It’s an opportunity for us to give advisers tools that are similar to other offerings but [which] don’t take them out of the middle of the relationship with the client,” said Amy Webber, president of Cambridge. “I don’t think it’s a threat. We have to figure out how to integrate it and we have to embrace what an investor wants from it. It’s a low cost tool for the next gen client who typically doesn’t have a lot of money” that ultimately will contain a pay-for-advice component, she said.

Some type of robo-offering will be a 2016 technology initiative at Cambridge. “I think we will have pieces of it,” Ms. Webber said. “It could be a digital partner to the planning and advice process and [include] tools we already give our advisers. Just like websites didn’t exist 20 years ago, it’s another tool we will plug into this independent model that keeps evolving.”

So-called robo-advisers, or automated wealth management platforms, appear to be gaining traction among traditional brokerage and registered investment advisers. In the fall, Commonwealth Financial Network CEO Wayne Bloom said the firm was looking at how it could develop a robo-adviser type offering that meshes with the high-end practices of its 1,700 registered reps and advisers.

Also in the fall, high-profile advisory firm Ritholtz Wealth Managementlaunched its own robo-adviser platform with the help of technology startup Upside Financial. In October, Charles Schwab Corp. said it was introducing an online advice platform for retail investors in the first quarter of this year and an online platform that advisers can use with their clients in the second quarter.

“In our space, I see them as more of a digital partner to what the adviser does,” said Ms. Webber, who made her comments in San Antonio, Texas, on Tuesday at the annual meeting of the Financial Services Institute. “Our human advisers will keep doing the great work that they do, but Cambridge has to give them some tools where they can talk to their clients who will say to them, ‘Hey, my neighbor is using a robo-adviser.’”

Children of older clients are using robo-advisers, and then they bring what the robo-adviser produces to meetings and ask advisers what to make of it, she said. “That’s where the value of the adviser comes in,” she said. Robo-advisers will be attractive to the so-called do-it-yourself investor, who first gained attention in the stock market boom of the 1990s, she said.

An internal group of advisers is looking at the issue, she said. Current robo-offerings vary. “They have financial planning tools, such as a plan and a proposal,” she said. “But, do we really want the end client trading? Is there a stop at that point that pings the adviser and asks, ‘What do you think?’”

For the original article from InvestmentNews, click here.

Oppenheimer’s Penny Stocks Results in $20M Fine

Posted on January 28, 2015January 28, 2015 by admin

Oppenheimer fined for failure to report suspicious penny stocks

Brokerdealer.com blog update is courtesy of Mason Braswell from InvestmentNews

Brokerdealer firm, Oppenheimer & Co. Inc., has reach a deal with the SEC and FinCEN resulting in the firm paying $20 million, pleading guilty, and hiring an independent consultant over improper penny stock trades. The SEC and FinCEN said, firm failed to prevent suspicious penny stock trading and pump-and-dump schemes.

The firm, which runs a retail brokerage operation with around 1,400 financial advisers, failed to properly detect and report suspicious trades in penny stocks, which are thinly traded securities that can be vulnerable to manipulation by stock promoters, according to FinCEN. The regulator identified at least 16 customers in five states who engaged in “patterns of suspicious activity.”

“Broker–dealers face the same money laundering risks as other types of financial institutions,” said FinCEN Director Jennifer Shasky Calvery, in a release. “And by failing to comply with their regulatory responsibilities, our financial system became vulnerable to criminal abuse. This is the second time FinCEN has penalized Oppenheimer for similar violations. It is clear that their compliance culture must change.”

In a parallel action, the SEC pointed to two instances between 2008 and 2010 in which the firm engaged in unregistered sales of penny stocks.

In one case, a financial adviser and his branch manager willfully engaged in unregistered sales of 2.5 billion shares of penny stocks on behalf of a customer, despite the fact that the shares were not exempt from registration, according to the SEC settlement. The trades generated $12 million in proceeds, of which Oppenheimer was paid $588,400 in commissions.

The settlement did not name the broker or branch manager, but said that its investigations into the matter were ongoing.

The other charge revolves around Oppenheimer’s role in possibly assisting allegedly illegal activity by a Bahamas-based brokerage firm, Gibralter Global Securities.

The firm disclosed in quarterly filings earlier this year.

that it was setting aside $12 million to deal with the possible fallout from regulatory investigations, mostly dealing with penny stock issues.

The head of the firm’s retail brokerage, Robert Okin, resigned in December, reportedly to pursue other interests. His Finra BrokerCheck record discloses he is facing an SEC investigation.

A spokesman for Oppenheimer, Stefan Prelog said in an email that the firm was “pleased to put these matters, which involve activity that occurred years ago, behind it.”

The firm has also agreed to hire an independent consultant as part of the settlement.

Risk is Worth the Reward: Brokerdealers Still Have Faith in Russia

Posted on January 27, 2015 by admin

Brokerdealer.com blog update is courtesy of Bloomberg Businessweek’s Ben Steverman.

For the past few years, only risk-taking brokerdealers have had the courage to invest their clients’ money into the Russian Market. Many brokerdealers have not been able to see what opportunity there was in Russia. Bloomberg’s Ben Steverman has been able to crack the code and found the opportunity.

On paper, there’s no good reason to invest in Russia right now. The country’s dealing with a collapsed currency, plunging oil prices, recession, conflict in Ukraine, sanctions, and a government that’s hard to predict. The MSCI Russia Index lost almost half its value last year, and those losses could continue in 2015 and even into 2016. On Monday, as fighting in Ukraine intensified, the ruble dropped another 2.3 percent against the dollar, to its lowest level since Dec. 16.

For the intrepid, the thrill-seeking, or the very wealthy, however, Russia still has an appeal. Since August, investors have poured $861 million into the Market Vectors Russia ETF (RSX), the largest U.S.-based Russia fund. “In investing, what is comfortable is rarely profitable,” according to investment firm Research Affiliates in a new analysis. “Investing in Russia now is definitely discomfiting, but it might pay off in the long run.”

Here’s the opportunity they see:

Investors are watching Russia’s inscrutable and unpredictable government for any signs that President Vladimir Putin might be ready to make nice with the West or reform the Russian economy. So far, no dice. But, historically the Russian government has been more “business-friendly and reform-minded” when oil prices are low, Bank of America strategist David Hauner said in a Jan. 12 research note. Oil under $50 a barrel could spur Putin to do something about Russia’s economy, famously unproductive and overly reliant on the energy industry.

Sanctions are depriving Russia of the foreign technology and capital it desperately needs, to the tune of $100 billion in capital this year, BofA estimates. But, Research Affiliates notes, those sanctions are “relatively mild” compared with those imposed on Iran, Cuba, or North Korea. And Russia still has relatively low debt and high currency reserves, while it continues to provide much of Europe’s energy. “Logically, this crisis should pass,” Research Affiliates says.

Finally, in exchange for the extreme risks involved with Russia, investors are getting some outstanding deals. The MSCI Russia Index’s price-earnings ratio is 4, compared with the Standard & Poor’s 500-stock index’s 18.1. Based on their valuation, Research Affiliates calculates Russian stocks could return 16.9 percent per year over the next 10 years, more than any other developed or emerging market.

Then again, the firm also expects Russia to be the second-most volatile market in the world during that time span, after Turkey. Investors may need strong stomachs for quite a while: Without reforms, Bank of America estimates Russia won’t fully recover from this downturn until 2019.

For the original article from Bloomberg Businessweek, click here.