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An Investor-Friendly Way to Switch Broker-Dealers

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It’s always best to sell your move from one broker-dealer to another by telling clients how you can better service their account at the new firm. There’s also an investor-focused approach: Compare the broker-dealer move to moving out of one stock and into another.

By taking this investor-friendly tactic, you are giving clients a clearer outlook.

Clients are accustomed to discussing the valuations of potential investments with their financial advisor. The right stock price data can both inspire confidence in the firm that you’ve selected and help get your clients excited about transferring their assets over to another firm. 

Some clients might be impressed by market heft: Morgan Stanley (MS) weighs in with a market cap of about $69 billion, while Wells Fargo (WFC) is at over $280 billion. Regional brokerage firms – which tend to be much smaller – also can be positioned as exciting growth stories. 

For example, Ameriprise Financial (AMP) may be a bantam weight at $24 billion (which is still nearly 45% bigger than Con Edison), but the company’s cumulative 5-year return on its stock is more than 450%. The S&P was up 128% during this period. Meanwhile, the stock price of Raymond James (RJF) has appreciated by 136% in the last five years, and the firm had had 107 consecutive profitable quarters since the third quarter of 1987; plus, the firm’s stock has a compound annual growth rate of 16% over the last 20 years.

Meanwhile, Stifel Nicolaus (SF), with about 2,200 brokers, has had 18 years of record revenues. Since 2000, the stock is up by over 1,000%.

Independent Firms

You can offer comfort with numbers even if you are going independent. Many brokers, RIAs and firms custody assets via one of the three large publicly traded custodians – Schwab (SCHW),  Pershing (BK) and TD Ameritrade (AMTD). Or they may use another custodial firm (like National Financial) for which it’s easy to find compelling financials to present to clients.

This information is, of course, in addition to the sharing of other particulars about the independent broker-dealer you’ve chosen and how clients will benefit from your new role as a business owner.

Often, presentations created by investor relations departments can be a good source of potential bullet points. The investor relations people with whom I’ve spoken are typically helpful and reliable sources of information

Here are some quick points:

  • Schwab has $2.44 trillion in client assets and a market cap of $37.5 billion.
  • Fidelity boasts 23 million customers, administers some $5 trillion and manages roughly $2 trillion. Its clearing and custody division has $1.4 trillion in assets under management, along with 3,200 clients and 5.5 million accounts.
  • Pershing oversees $1.5 trillion in global client assets. It is owned by BNY Mellon, which has $28.3 trillion in assets under custody or administration, $1.6 trillion in assets under management and operates in 100 different markets.
  • TD Ameritrade is owned by one of Canada’s premier banks, which boasts about $800 billion (or Canadian $945 billion) of assets under management. TD Ameritrade client accounts have $650 billion of AUM, and clients do 400,000 trades per day. TD’s RIA division has $300 billion in AUM and 4,500 accounts.

A picture can paint a thousand words, and sometimes a few key financial figures can speak volumes, too.


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