Top 5/Bottom 5 Indy BD Choices

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Feb 2, 2010 12:28 pm

Here's one for the masses... whether you're independent already or just thinking about it, I'm working on a project touching the BEST and WORST of the independent BDs out there. I'd like some informal and certainly unscientific feedback from the crowd here.

Please respond with your:

TOP 5 picks.. who would you go to or stay with on the indy side- a word or two stating why would be nice


BOTTOM 5- who do you hate, would you not work for or want to leave if you're there now- add a word or a few descriptors as to why you feel this way

THANKS!!!

Feb 2, 2010 1:55 pm

my 2 cents (without listing any names)

The indy world is growing at a very fast rate. Make sure whatever firm you choose, that it can handle the growth. I had an experience with a good sized B/D that was located in the middle of nowhere. It was great until the mass movement into indy occurred. Then everything fell through the cracks. Because of their location, they had a "limited" pool of people in the surround communities. They had a really hard time hiring good people. So they decided to replace customer service with technology. Big mistake and they lost good reps who got fed up with them.

Stick with a b/d that is located in a major city.

Feb 2, 2010 2:05 pm

Cambridge?

Feb 2, 2010 2:10 pm
CALI123:

my 2 cents (without listing any names)

The indy world is growing at a very fast rate. Make sure whatever firm you choose, that it can handle the growth. I had an experience with a good sized B/D that was located in the middle of nowhere. It was great until the mass movement into indy occurred. Then everything fell through the cracks. Because of their location, they had a "limited" pool of people in the surround communities. They had a really hard time hiring good people. So they decided to replace customer service with technology. Big mistake and they lost good reps who got fed up with them.

Stick with a b/d that is located in a major city.



So, I take it a BD in Des Moines or Stola City is probably not on your radar?!  Thanks for the feedback. Makes a lot of sense

Feb 2, 2010 2:41 pm
CALI123:

my 2 cents (without listing any names)

The indy world is growing at a very fast rate. Make sure whatever firm you choose, that it can handle the growth. I had an experience with a good sized B/D that was located in the middle of nowhere. It was great until the mass movement into indy occurred. Then everything fell through the cracks. Because of their location, they had a "limited" pool of people in the surround communities. They had a really hard time hiring good people. So they decided to replace customer service with technology. Big mistake and they lost good reps who got fed up with them.

Stick with a b/d that is located in a major city.


Disagree completely with the last statement(thought depends what you consider a major city).. I think like you said the b/d has to be able to handle and know what to do with growth, not just want it.
 
The more major city you go, the higher the expenses(salaries, offices etc).
 
THough i am younger so I prefer email contact as opposed to waiting on the phone and talking to someone who makes up an answer, in email it's documented and then you move to next level..
Feb 2, 2010 2:43 pm

let me restate - a larger city. Avoid the b/ds sitting in the middle of the cornfields.  - from my personal experience.


Feb 2, 2010 2:44 pm

one more thing... make sure to talk to Commonwealth. For the past few years they send me all sorts of cool gifts -even though I never had more than a 20 minute conversation with them. Just got my football today...

Feb 2, 2010 2:46 pm
iceco1d:

Burton,

 
If I were to move, I would be considering (in no particular order):

-LPL My only fear with them is size and intergration. I have some friends there who are starting to have issues with getting things done(simple things) they also have a huge issue against outside business(i.e. insurance/indexed annuities)
-Raymond James A little more costly then LPL but I think worth it. Very good firm/systems/platforms(a little weak in alternatives by choice)
-Commonwealth
-Cambridge
-Harbor I would vote these guys number one(would love to move there).. Beautiful platform(TDA & RJ) freedom on insurance(CRUMP) and a fixed cost, no more guessing.. They are my goal in 2-3 years.
 
For RIA custodian, it would be a no-brainer - Trade PMR TD Ameritrade is real good too..
 
Indies I would avoid would be...
 
-Ameriprise No kidding
-Finet
-Anything under the AIG umbrella
-NEXT: Like a lot of these firms that win B/D awards, just complete crap and marketing..
 
and for RIA custodian, I would definitely avoid Fidelity (they just seem to have gotten too "fat" with the wirehouse fallout last year...they don't want anyone under $100MM and an average account size of $250K - mind you, not HOUSEHOULD, ACCOUNT SIZE).
 
 
Feb 2, 2010 3:00 pm

They are an example of a firm that grew to quick and has no idea how to adapt, plus the guy who initiated the growth left(jeff ausll or something like that) and they had no idea what to do..

Feb 2, 2010 3:01 pm

I'ms sort of surpprised TradePMR only has like $2B under management.  I realize they are relatively new, and cater to smaller RIA's.  Hopefully they are not planning to get bought one of these days.

Feb 2, 2010 3:38 pm
Squash1:
iceco1d:

Burton,

 
If I were to move, I would be considering (in no particular order):

-LPL My only fear with them is size and intergration. I have some friends there who are starting to have issues with getting things done(simple things) they also have a huge issue against outside business(i.e. insurance/indexed annuities)
-Raymond James A little more costly then LPL but I think worth it. Very good firm/systems/platforms(a little weak in alternatives by choice)
-Commonwealth
-Cambridge
-Harbor I would vote these guys number one(would love to move there).. Beautiful platform(TDA & RJ) freedom on insurance(CRUMP) and a fixed cost, no more guessing.. They are my goal in 2-3 years.
 
For RIA custodian, it would be a no-brainer - Trade PMR TD Ameritrade is real good too..
 
Indies I would avoid would be...
 
-Ameriprise No kidding
-Finet
-Anything under the AIG umbrella
-NEXT: Like a lot of these firms that win B/D awards, just complete crap and marketing..
 
and for RIA custodian, I would definitely avoid Fidelity (they just seem to have gotten too "fat" with the wirehouse fallout last year...they don't want anyone under $100MM and an average account size of $250K - mind you, not HOUSEHOULD, ACCOUNT SIZE).
 
 



Thanks for the frank and open feedback! 

Feb 2, 2010 8:14 pm

The destruction of NEXT came from the top where the priority was to grow at all costs. Someone thought that unsustainable growth was attractive when in reality, it was impossible. Thus, service suffers.


<?: prefix = o ns = "urn:schemas-microsoft-com:office:office" />To say one b/d fits all is a fallacy. There are many great b/ds out there with the sole purpose of this understanding: The advisor is the client and their job is to help facilitate and process business effectively and efficiently. Many of these great firms don't advertise because they DON'T want to grow too fast and outpace their ability to provide excellent service. They are almost like an exclusive club.


The way you answer the question "Which indy b/d is right for me?" is by performing self discovery on your practice, identifying and listing you top priorities and concerns, and then research for potential matches. Service, technology/platforms/procedures, culture/values/ideologies, marketing assistance, transition assistance, FINANCIAL STRENGTH, future b/d growth plans and expectations, etc. are just a few items to think about.


I think the best independent firms are VERY selective about who they allow to affiliate with them and they have a strategic vision about how they want to grow and aren't afraid to tell you. A few things that I would suggest asking when performing your due diligence is:


1. Document rep and management turnover for the last two years


2. Perform a FINRA background check


3. Check b/ds financials


4. Service metric - what metric or set of metrics does the b/d have in place to measure their level of service to the advisors in the field. Ask this early in the interview (it is an interview... they should be interviewing you as much as you are interviewing them for commonality and fit), if they can't answer it right away, they don't have one. Take a home office tour to get a feel for the corporate culture and look to see if the employees are happy or not, you will know.


My mama always said, "Broker/dealers are like a box of chocolates, you never know what you're gonna get... until you affiliate."

Feb 3, 2010 12:21 am

LPL is pissing me off with their stupid gestapo CIP issues.  We can't open an account anymore without the new client being questioned as if they were members of the Taliban.

 
They've been great in the past, but right now, they need to get their sh*t together.  With what we've been dealing with the past couple of weeks, I wouldn't recommend them to the shoeshine bear.
Feb 3, 2010 12:24 am

Also, if you do a significant amount of VA's, Raymond James sucks.  My book is about 20% VAs and as a result, I won't consider RayJay unless everyone else starts haircutting like RayJay.

Feb 3, 2010 6:36 am

LPL and Commonwealth are the big players in my area. But, Investors Capital has been stealing brokers away from both. Their selling point is service and they just hired a bunch of new operations people to handle the demand. I sell quite a bit of VAs and I would consider them a VA friendly B/D. I get paid 90% on everything and 100% on insurance if I go direct.

Feb 3, 2010 10:33 am
Indyone:

Also, if you do a significant amount of VA's, Raymond James sucks.  My book is about 20% VAs and as a result, I won't consider RayJay unless everyone else starts haircutting like RayJay.


Explain??
Feb 3, 2010 11:33 am
Squash1:
Indyone:

Also, if you do a significant amount of VA's, Raymond James sucks.  My book is about 20% VAs and as a result, I won't consider RayJay unless everyone else starts haircutting like RayJay.


Explain??


 
I do L-share annuities.  I like 'em because they have a short (4-year) surrender, which makes them client-friendly.  They also pay an up-front of 3-4% and have a 1% trail so I am paid to do all the paperwork and planning now and get paid a fee to service and reallocate them each year.  RayJay thinks the L-share pays me too much and outlawed them.  I happen to disagree.
 
Worse yet, I suspect that the push to make vendors create custom RayJay annuities was designed to camoflage a haircut system where RayJay keeps a bigger piece of the pie much like Edward Jones does.  I have no proof of this...just an uneasy suspicion.
Feb 3, 2010 11:44 am
Indyone:
Squash1:
Indyone:

Also, if you do a significant amount of VA's, Raymond James sucks.  My book is about 20% VAs and as a result, I won't consider RayJay unless everyone else starts haircutting like RayJay.


Explain??


 
I do L-share annuities.  I like 'em because they have a short (4-year) surrender, which makes them client-friendly.  They also pay an up-front of 3-4% and have a 1% trail so I am paid to do all the paperwork and planning now and get paid a fee to service and reallocate them each year.  RayJay thinks the L-share pays me too much and outlawed them.  I happen to disagree.
 
Worse yet, I suspect that the push to make vendors create custom RayJay annuities was designed to camoflage a haircut system where RayJay keeps a bigger piece of the pie much like Edward Jones does.  I have no proof of this...just an uneasy suspicion.
 
An Indy firm that doesn't let you sell L-shares.  I wouldn't call that Independent.
Feb 3, 2010 11:50 am

I didn't realize they did that...that sucks..

 
Does anyone know if Harbor does that? ( I know they use the RJ platform but not sure if they adhere to all the VA policies) ice?
Feb 3, 2010 4:43 pm

Have any of you had any dealings with Centaurus?