I am noticing a trend that some B/D Firms are moving away from the typical haircut business and instead, offering the Advisor 100% payout in exchange for paying the B/D a set monthly affiliation/marketing fee.I believe Capital Analysts underwent this change and other B/D firms like Securities Service Network, Harbor Financial all have similar models of this structure. Appears to be a growing trend. I believe the B/D's doing this want more consistent income for themselves as opposed to relying on the typical haircut model. Thoughts on this subject anyone?
I think it’s a great idea a long as your production is high enough, there are obviously benefits at certain production levels.
I.E. Harbor charges $1100/month < $250K. So if I am doing $100K then i am getting a 86.8% payout. But if I do 225 then I am up near 94%.
I also like the idea of access to TDA and 20bps for unlimited trades.
Only fear is if they increase the monthly fees(which they would have to do) but i guess the idea is if you are increasing your production then a small increase every so often wouldn’t be terrible.