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

 

Taking the Deal

 

Taking the Deal to Change Firms

For over thirty years most major (and some smaller) firms have offered some form of financial incentive in order to entice investment professionals to join them.

Such "deals" take many forms, and in recent years have become increasingly complex and inventive.  We will not attempt to analyze the complexity of all such arrangements, for each set of circumstances must be analyzed on its own merits in light of each individual personal and financial situation.

Virtually all of these arrangements have two common elements, a period of commitment (usually contractually) and tax consequences.  Are such deals really beneficial to the individual broker?  Perhaps, but there is a better answer for those so inclined.  Consider becoming an independent broker and setting up your own professional corporation.

Consider the following example:

You are a $500,000 producer being offered a $500,000 incentive "bonus" to switch from one firm to another.  This incentive is being structured in the form of a forgivable four year loan.

You take the deal and deposit the check into an investment account of some sort.  For each of the next four years, your taxable income is $325,000 or so (including the $125,000 in forgiven loan balance in each of these four years).  To this sum you must add any non-salary benefits such as firm contributions to retirement plans, etc.

However, instead of taking the deal, you go INDEPENDENT and have an after expense taxable income of $350,000.  BUT, because you have a properly structured professional corporation, you deposit a substantial sum into a properly structured retirement plan, or utilize the excess funds in some other tax deductible manner.

WORK THROUGH THE NUMBERS.  In almost any case, you are better taking the independent path, IF RUNNING YOUR OWN BUSINESS IS FOR YOU.  Naturally, taking the independent path involves no commitment as to time and no "golden handcuffs."

Please call us for structural details

 

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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