Over 30 years experience analyzing dealer concessions, re-allowances, retention bonus agreements, retention awards, retention bonuses, recruiting bonuses, training bonuses, forgivable loans, commissions, fees, salaries, bonuses, production overrides, product revenues, profitability, productivity for stock broker, product wholesalers, product managers, trading desk profit, financial planner or investment adviser commissions, fees, customer agreements and compensation plans including cash, deferred, bonus, options, restricted stock awards, recognition awards (like Chairman’s, President’s club and titles like managing director (MD) or senior vice president (SVP) of investments).
Some financial services industry compensation – related cases may involve potential bias related to gender, race, age, ethnicity, seniority, training or titles, job promotions, opportunity, prized office space, sales support, account distribution, disparate recognition, perks or sexual harassment.
FIDUCIARY ACCOUNT AUDIT™
In FIDUCIARY ACCOUNTS a Fiduciary Account Compliance Testing Solution™, commission or fee-based audit is among the best ways a trustee or fiduciary can spot potential cost savings, negative fiduciary compliance exposure issues and satisfy their personal fiduciary duty owed all beneficiaries of the FIDUCIARY ACCOUNT.
Customers often simply refer to their financial adviser as “my stockbroker” but the stock broker may also use titles or designations like investment executive, Senior VP of investments, MD (Managing Director), PM (Portfolio Manager), Financial Consultant (FC), Senior adviser, Retirement planning specialist (RPS), Financial planner, CIMA, CFP, CIMC, CFA, CAIA, AIF. Several years ago the NASD issued a list of its approved designations. Today FINRA supervises the titles that may be used by registrants.
Titles come and go – and it’s important to distinguish between them.
Stock broker compensation is usually based upon commissions, fees, assets under management although there are myriad other forms of compensation or incentives in the securities and financial services industry.
Commissions are usually based on a trade or transaction. Fees are usually based on the amount of assets in the customers’ account (or household) and are usually billed quarterly in advance. Fee-based accounts usually do not charge commissions per transactions, however in some situations an account may be charged both fees and commissions.
Managed accounts, also known as “Fee-based accounts” (also Managed Money or Investment Consulting Services accounts) began in the 1980’s at EF Hutton & Co. (like EFH Directs, Suggests programs). Mr McConnell performed analysis and accounting in the 1980’s comparing these accounts to many other brokerage firms’ fee-based accounts like Merrill Lynch Suggests, Paine Webber Command, Prudential, Dean Witter soon copied these managed account programs. EF Hutton was acquired by Shearson after the 1987 Stock Market crash, then in 1993 Smith Barney acquired Shearson and became the leading provider of managed or fee-based customer accounts.
There are several fundamental reasons why some firms and FA’s dominate or lag behind fee-based overall or in certain customer account segments; which upon consultation we may point out to you.
For more information firstname.lastname@example.org or (310) 943 – 6509
© Chris McConnell & Associates 2003 – 2016 All rights reserved