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Naturally, every firm
has its strengths and weaknesses. We feel that among our strengths
are our impeccable clearing relationships, our risk adverse posture,
and the one hundred plus years of combined industry experience
attained by our principals. Additionally, this firm has been very active
in alternative investments such as "managed futures programs" which
is a rarity even at the larger firms. Most "stock brokers" are of
the opinion that the "futures" area is strictly for very high net
worth individuals or gamblers but this is not so. As you may be
aware, these programs (if properly managed) are capable of profiting
in any economic environment. Few of us are naive enough to believe
that the equity market represents the only investment arena, our
clients probably don't.
There are many reasons
for becoming an independent and having your own business, such as
the ability to offer products which your present firm does not
offer, paying only for the services which you need, the ability to
design your own (more effective) retirement plan, the ability of
doing institutional and discount business at will, the elimination
of office politics, favoritism, and so forth.
However, please have
absolutely no illusions, operation as an independent broker is
NOT FOR EVERYONE. Over the years I have known many ladies
and gentlemen who were exceptional brokers with excellent client
orientation and fine compliance records who would have been unhappy
as independents.
To complicate the
decision making process further, we believe that the independent
firms differ far more from one firm to the next than do their larger
wirehouse brethren.
Having spent
twenty-three years with many "larger firms" before setting up this
firm, I feel quite confident in the statement: "All of the large
firms are very much the same save for the individual political
climates". Oh, sure, some have slightly better benefit plans
than others, or one may have a more tolerant attitude toward
discounting than another, but still it's pretty much the same in my
opinion. The gentleman who works for a major firm based in New York
doesn't really have anything to offer that a lady who works for "The
Stage Coach Line" doesn't have.
The independents,
however, differ widely; there are those which offer brokerage
services largely slanted toward traditional packaged product, but
charge outrageous clearing fees for doing a simple stock trade. If
you are associated with one of these firms you have no ability to be
competitive on a "full service" business. We are able to offer
extremely competitive clearing fees. While a vast majority of
competitors have some sort of per desk charge for clearing firm
access, etc., we are able to offer those services without cost.
There are securities
firms which do not offer futures product, and then there are
"introducing" futures brokerages which do not offer any securities
products. Each of these restricts the ability of an investment
professional to offer his or her client a full range of product.
Unfortunately, there
are firms which will admit or retain "problem brokers." One can only
assume that the motivation for this activity is financial. In
today's increasingly regulated environment such firms frequently
find themselves pressured into instituting extremely restrictive and
burdensome procedures. Ultimately such firm's brokers suffer in one
way or another.
Unlike some of our
competitors, we never intend to grow this firm to an unmanageable
size. Nor will we maintain relationships with the ethically
challenged.
As with most firms, we
need to maintain certain criteria for operating a branch office. We
have additional requirements other than the general regulatory
items. For a list, please visit the
requirement
section of this website.
Once a decision to
make a change is reached, and a new relationship (firm) decided
upon, the single most important task remaining is (in our opinion)
the outline of estimated start-up costs and the design of an
operating budget. Unfortunately, there really is no formula for this
procedure; each situation is different. After all, one of the
reasons for becoming an independent is "paying only for the services
which you need." We do offer some help in the office setup and
budgetary planning processes for those who desire it. In closing, I
feel it is worth noting that during the course of the bear market in
the new millennium, the average wirehouse business was down in
excess of 40%, while in the independent and financial planner
businesses, revenues were off only about 25%.
We
look forward to discussing these matters with you. |
