It appears that the best broker/dealers limit the number of investment vehicles on their approved list. That’s one of the findings of The Art of Efficiency: A Holistic Approach to Operations, the new study by Moss Adams and sponsored by Pershing LLC affiliate iNautix (USA).
While one of the noticeable findings of the study was a link between operational efficiency and greater profitability, it also found that cutting down on the number of products and putting some discipline into product strategies also produces bottom-line benefits, according to Mike Nesspor of iNautix.
“Having 50 annuity providers seems excessive to me,” Nesspor says. It happens, he suggests, “when someone thinks they have to have a certain product on their platform, but they haven’t factored in the cost of delivering” the product onto the platform.
For example, the survey found that the median number of separately managed account managers in top-performing broker/dealer firms was seven, compared to 31 in all other firms surveyed.