How do you set up and indy firm

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Dec 21, 2008 2:11 pm

I have a client who wants to finance me to start an independent firm.  How do you deal with compliance, sec etc.  What mutual funds would I be able to sell.  What platform would I use to do stock trades and how much should I charge and could I do CDs and or Bonds?

 
Thanks,
Dec 21, 2008 2:42 pm
bull09:

I have a client who wants to finance me to start an independent firm.  How do you deal with compliance, sec etc.  What mutual funds would I be able to sell.  What platform would I use to do stock trades and how much should I charge and could I do CDs and or Bonds?

 
Thanks,
 
Having a client finance you is an easy way to exit this industry.  If I were you, I'd wait until you have the money saved and finance yourself.
Dec 21, 2008 3:13 pm
bull09:

I have a client who wants to finance me to start an independent firm.  How do you deal with compliance, sec etc.  What mutual funds would I be able to sell.  What platform would I use to do stock trades and how much should I charge and could I do CDs and or Bonds?

 
Thanks,


This is something you should never ever repeat to anyone who knows your real name.
Unless you aspire to be a Ladies Shoe Salesman at the local mall.

Dec 22, 2008 2:07 am

First  of my real name is Bud Fox but that's beside the fact.  What am I missing?  I could fire him as my client to become my partner.

Dec 22, 2008 7:13 am

Do you actually mean that you wish to form your own indy broker dealer, not just your own practice through an existing indy bd? If so, there is a reason very few people do this with all the hassle involved. You can read about the process in a nutshell in After the Trade is Made or just goodle FINRA Form BD which will bring up a lot of other information. When you see all the compliance and regulatory nonsense necessary to go this route as opposed to just going indy through someone else, you'd opt not to.

Dec 22, 2008 1:51 pm

I believe what you say about compliance, regulation etc.  I would be interested in an LPL type of a set up.  Is there a law against parterning with a current client.  He's setting on 1 million in cash and I guess he thinks I would be a good return.  He knows I've charged him a lot in commissions and he thinks we could do better or as good a job as my firm for a lot less money.

 
Having said that I'd like to know the availability of products within an LPL set up and what's the payout.
 
 
Dec 22, 2008 4:58 pm

You need to talk to an attorney---but as an active OSJ, I can tell you two things:  A client is a client--borrowing money from a client is a death nail as it should be.  Number two is if you make your client a partner--they have to be a licensed FA. 

 
Bull09 I can tell you haven't been in this business very long--if you have you are either doing a poor job, don't know your butt from a hole in the ground, or just plain stupid.  I hope you don't have any reproductive capability--two of you walking the face of the earth is scary enough---however, you have proven your qualification to be a Governor of IL or a U S Senator.
 
Good Luck with your quest! 
 
PS: When you get to prison--a hint: don't bend over to pick up the soap!
Dec 22, 2008 5:09 pm

Is this client, by any chance, a large, middle-aged, balding "self employed" gentleman with interests in gentleman's clubs and waste disposal and a thick New Jersey accent who goes by the name Tony? Because, if he is, I'd be careful. I've heard rumors that he may actually be deceased.

Dec 22, 2008 5:21 pm
bull09:

I believe what you say about compliance, regulation etc.  I would be interested in an LPL type of a set up.  Is there a law against parterning with a current client.  He's setting on 1 million in cash and I guess he thinks I would be a good return.  He knows I've charged him a lot in commissions and he thinks we could do better or as good a job as my firm for a lot less money.

  Having said that I'd like to know the availability of products within an LPL set up and what's the payout.


The questions that present themselves from such a short couple of posts are almost endless.  What exactly do you mean when you say this client is "setting on 1 million in cash?"  What exactly do you think "an LPL type of set up" is?  Is he looking at this as a passive investment or as an active partner?  Are you really unaware of the plethora of regulations regarding accepting any money from clients???

It is painfully obvious from your questions that you simply do not know enough to do what you are contemplating in the near future.  Better to be told that bluntly now and only hurt your ego rather than find out the hard way and hurt both your ego and your career, and perhaps much worse. 

Just because someone may knock on a door, it doesn't mean you ought to
answer every knock.  Sometimes what you think is opportunity knocking
is actually a disaster disguised as opportunity.

Keep building your business while you begin to learn about and research the various forms of independence and figure out what it takes and which version might best fit you.  There are a number of posts on this topic in the archives here if you search for them.  Maybe one day you'll be ready to contemplate going independent, but it sure is not today.  Better to go slow and do it right than to rush and go straight off the edge of a cliff.

Dec 22, 2008 5:50 pm

Morphius is much nicer and has better PC than me--so to be nice for the holidays--I will just say I agree with him!

Dec 23, 2008 8:03 am

Roadhard it sounds like you did bend over for the soap on purpose and liked it.

 
I was aware of the regulation of accepting client money but actually wasn't sure if it was a company rule or SEC rule.  So back to my question.   If I fire my client that is give his account away could I then partner up with him.   He would be a passive investor and it not licensed.
 
You are all correct I don't know much about the Indy business and if I did I wouldn't be on this site.  Having been in the brokerage business I don't see a big advantage of being part of a big firm when you're giving your firm most of the money you generate.  I  know the name of you firm helps give you some credibility but my clients invest with me not my firm.
 
Anyway, Merry Christmas to you all and no hard feelings Road hard.
Dec 23, 2008 10:44 am

Your client can't even be a passive investor!

 
Merry Xmas
 
Dec 23, 2008 11:40 am

Do I really have to pick just one?

 
If I do, I vote for IQ.
Dec 23, 2008 12:12 pm
bull09:

Roadhard it sounds like you did bend over for the soap on purpose and liked it.

 
I was aware of the regulation of accepting client money but actually wasn't sure if it was a company rule or SEC rule.  So back to my question.   If I fire my client that is give his account away could I then partner up with him.   He would be a passive investor and it not licensed.
 
You are all correct I don't know much about the Indy business and if I did I wouldn't be on this site.  Having been in the brokerage business I don't see a big advantage of being part of a big firm when you're giving your firm most of the money you generate.  I  know the name of you firm helps give you some credibility but my clients invest with me not my firm.
 
Anyway, Merry Christmas to you all and no hard feelings Road hard.



I think it would be best if you stay at Primerica.

Merry Christmas, and good luck building your downline in '09.