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Industry Spotlight > Broker Dealers

Brokers Kicking the Tires

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Amid the chaos and uncertainty on Wall St., facing the possible loss of their jobs and a feeling that things are spiraling out of their control, many brokers from the firms that have been acquired or filed for Chapter 11 are in talks with the custodians of RIAs to consider their next steps. Mark Tibergien, president of Pershing Advisor Solutions, said that at the moment his firm is in talks with some 80 wirehouse teams on their options, which might include becoming a full-blown RIA or affiliating with an independent broker/dealer. Pershing, with its B/D clearing operation, is in a good spot to “make those introductions” for brokers, Tibergien says, though he points out that going independent is “not purely a financial decision” for those advisors who want to “focus on their clients.”

Many of those brokers, he says, “know they need religion; they just haven’t been born again” when it comes to embracing independence.

Schwab Institutional is also seeing plenty of interest from brokers. Spokesperson Lindsay Tiles reports that “call volume is up from prospective clients,” advisors who may have been “mulling this over for a year or so” but have been propelled to kick the tires, and find “independence has become more appealing” by the events of the last few months, and the last week. She points out, however, that this is a “tricky time” for those brokers, who have “other things to worry about–their own clients.” In addition to being the biggest RIA custodian, Schwab also has relationships with so-called “friendly” independent B/Ds, notably Cambridge Investment Research, to which it can direct brokers more comfortable with the independent contractor business model.

While he acknowledges the business opportunity that the Wall St. earthquake has created, Tibergien is quick to point out the human cost of this “profound transformation of the financial services landscape,” saying, “we also view this with a great deal of compassion for those who have lost their jobs and their net worth.”

He says, too, that there’s “a lot of cash on the sidelines,” held by institutions and investors, which “might provide a new economic opportunity, whether it’s in affordable housing or investing in equities, in what will eventually be a return to growth.”


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