Polar Investment Counsel Inc.

Independent Securities & Futures Brokers

Member: FINRA, NFA, MSRB, SIPC

Home Office: Thief River Falls MN

218.681.7344 * 218.681.1327 [fax]

Declare Your Independence

Indeed, there is a better life and a lot more money outside the wire house environment...

Today is      

 

Declare your
Independence!

 

ABOUT PICI
 
YOUR FUTURE?
 
TAKING THE DEAL
 
TRANSITIONING
 
CLEARING FIRMS
 
REQUIREMENTS
 
Q&A
 
FORMS
 
THE REP LETTER

 

Questions and Answers

You may have a few questions regarding PICI and how we operate.  If you don't find the answers or you have any additional questions, please give us a call or email:

Q: What sort of payout does PICI offer?
A:

This is a negotiable matter and depends on many things other than merely ones production level.  For example, the anticipated level of Home Office support that might be needed.  We do note, however, that our average payout is significantly higher than that of our competitors. 

   
Q: Will PICI allow me to operate my own RIA?
A:

Yes if we consider you qualified.  There is a small monthly fee for our monitoring of this business.

   
Q: Will PICI permit me to operate my own insurance agency?
A: Most probably.  There is a small monthly fee for our monitoring of this business.
   
Q: Does PICI have E&O insurance and am I required to pay for it?
A:

The firm has substantial E&O coverage that covers all firm associates.  The cost of this coverage is included in our monthly admin fee.  Consideration for maintaining a large groups own coverage would be considered in limited circumstances.

   
Q: If I become an independent broker, should I form a professional corporation?
A:

The answer is almost certainly yes.  We have found that most accountants and attorneys do not give adequate guidance in this matter and we are able to offer suggestions for your consideration.

   
Q: Can my present firm hold up my registration for any reason?
A:

No, not under any circumstances.  If you have a contract, they may pursue relief in arbitration to recover any money advanced or lent to you or to recoup training costs but they may not prevent you from transferring your registration to PICI.

   
Q: I have heard rumors that my current firm may seek a court injunction preventing me from calling or contacting my clients if I leave.  Is this true?
A:

While this has happened in the past, in accordance with current securities industry regulations, any such court order is virtually worthless.  Furthermore, any firm which in any way attempts to prevent a customer from doing business with whomever or wherever they wish, will almost certainly have a regulatory problem.  Please see the "transitioning" section of this site for more.  In our opinion, only real exception to this is the unfortunate soul who makes their home at Edward Jones.

   
Q: If I have or obtain my Series 24 license, I can run my own operation, correct?
A:

No, this is not so.  A S24 license is a general principal's registration.  It is the firm's decision if your office would be designated as an OSJ (Office of Supervisory Jurisdiction) or not.  Even if you are a designated OSJ, you are still directly supervised by the Home Office.

   
Q: Will I be allowed to hire additional brokers for my office and obtain an "override" on their production?
A:

Yes, but only if you are an OSJ Manager.  At no time is any rep authorized to offer anyone a contract.  The firm must interview and approve any and all new brokers.  As an OSJ manager, you receive an override percentage for all brokers you directly supervise based upon the individuals gross production (net of clearing costs).  If you are not an OSJ manager, you can receive compensation for bringing another broker on board through our referral program.

   
Q: Can I sell my book of business?
A:

Yes, but is a complicated matter.  There are many ways these deals may be structured and most require various disclosures, approval of all firms involved and of course, contractual amendments.  If it is your intent to retire in the foreseeable future, please let us know so that we can assist you in your planning.  Buying a book of business without the knowledge, consent and approval of the firm's involved is enough to get one barred from the business these days.

   
Q: I have heard that a firm may pay my spouse if I die, is that true?
A:

This is true, however, contractual agreements must be in place prior to your death and there are limits.  For example, assuming the proper contracts are in place, we can pay your spouse on existing business at the time of your death (at a reduced percentage) for as long as the business remains on our books.  If the client moves the account, we have no control over that.

   
Q: Are there any restrictions on where I may locate my office?
A:

Practically none.  We do require that all clients records are secure at all times and the firm must have access to the location for audit purposes and in the event of a fatality.

   
Q: Does PICI permit discounting and if so, will my payout be reduced in some circumstances?
A:

Yes, discounting is permitted and no, we do not invade payouts for discounted trades.

   
Q: PICI is a small firm, how will I have access to fixed income products?
A:

SWS has an excellent fixed income desk which utilizes the system "BondPRO".  In many cases, we are offered better prices than many much larger firms receive.  In addition to this, we allow experienced fixed income brokers to buy and sell fixed income products "on the street" therefore obtaining the best price possible.

   
Q: Does PICI provide financial planning software?
A:

No, the firm does not, however our associates are permitted to use, in addition to the SWS system, software systems of their choosing but the program must be approved by us prior to any use.

   
Q: Is it possible for me to view the firm's compliance manual and other firm related material prior to my making a decision to join?
A:

Yes, but only once you are seriously considering joining our firm and you have signed our release document.

   
Q: Is there a requirement that my office be audited?
A:

Regulation requires that all branch offices have on-site audits performed based upon the branch activity.  OSJ offices are required to be audited annually, non-OSJ offices are either on a three year or five year cycle.  Most are three year cycle offices.  An audit fee is assessed based upon location and activity.

   
Q: Does PICI have a minimum account size?
A:

While the firm discourages opening accounts of less than $10,000, in most circumstances there are no penalties concerning any small accounts.  SWS however, does access a fee for any account that is inactive (value under $25,000 and no trade activity for 12 months).

   
Q: May I conduct outside business activities?
A:

Yes, but such activities must be approved (in writing) by the firm in advance of any business activity.

   
Q: Does PICI have any intention of selling or merging?
A: No
   
Q: What do I tell my clients when they ask why I am moving to a small firm that is not well known?
A:

What you tell them is you are setting up your business with a firm that offers a greater opportunity for lower costs and more investment opportunities for them.  If they are concerned about the safety of their assets, you can explain to them that their securities assets are held by an NYSE member firm (SWS) which offers the same protection (no more-no less) that they would receive at any of the major firms.  While Merrill, Lehman, Wachovia, etc have all failed, PICI has survived the environment that killed those firms.

   
Q: How do I deal with the charges my clients will be accessed for transferring their accounts?
A:

Offer discounted commission and fees until such charges are more than paid for.

   
Q: How does PICI view the "landscape" for brokers and investment firms in the coming years?
A:

We are glad you asked.  We feel there will be significantly more consolidations and some failures over the course of the next several years as the global economy continues to contract and deleveraging progresses.  Additionally, we feel that the number of investment professionals will shrink by around 40% from whatever levels existed in mid 2009.  Basically, brokers who do not add "real value" to their client relationships will probably not survive.  Unfortunately, many brokers, indeed most firms, have no idea how to do that.  This situation presents tremendous opportunities for those who are in situations and circumstances which will allow them to take advantage of it in the building of their business.

   
Q: Is there anything else PICI can tell me?
A: Sure - give us a call!  218-681-7344

 

ABOUT PICI YOUR FUTURE?  TRANSITIONING  CLEARING FIRMS  ●  REQUIREMENTSQ&AFORMS

 THE REP LETTER

 

For more information contact:

Michael C. Jordan

mjordan@polarinvest1.com

Professional Biography

President

218.681.7344

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