Top Five Upward Concerns for Advisers in 2015

Posted on January 2nd, 2015 at 10:08 AM
Top Five Upward Concerns for Advisers in 2015

From the Desk of Jim Eccleston at Eccleston Law Offices:

Financial advisers are serious about growing their businesses in 2015. On one side, they see plenty of opportunities for growth; on the another side, they also see the uncertainties, like broker-dealer consolidations, the possibility of increased regulation and the mixed blessing of multiple business models to choose from.

First, broker-dealer consolidation is unprecedented and on the minds of financial advisers. Firms should expect to have answers to tough questions if they hope to recruit advisers, like what does a recent buyout or merger mean for my day-to-day operations? Will it affect the level of service? What about payouts and expenses?

Second, rather than setting up solo practices, the trend for advisers to tuck into existing broker-dealers, RIAs or branches will continue in 2015. Advisers often worry about the distractions involved in setting up a solo practice.  The set infrastructure, economies of scale and built-in back-up support in ensemble practices are attractive to advisers looking for independence.  In response, we expect firms to continue to present plenty of tuck-in choices for transitioning advisers.

Third, the lack of financial advisory businesses for sale will continue to frustrate growing advisers. Advisers are looking for books of businesses to buy in an effort to grow their practices. But the current reality is there just are not that many businesses for sale and we don't see this changing anytime soon.

Forth, rumors of increased regulation, particularly in the RIA-hybrid arena, give advisers pause. In general, this new regulation could fall to the broker-dealers to provide more oversight. So far, this added level compliance doesn't seem to be a deal-breaker for advisers attracted to the flexibility and growth potential this business model offers. However, firms should be prepared to address the concerns with advisers in transition.

Fifth, financial advisers are taking a good hard look at their practices to identify gaps and potential areas of efficiencies. Once advisers identify areas for potential growth, they are reaching out to their current broker-dealers, custodians and clearing firms for support and resources in their efforts to expand. When advisers don't feel like they are getting the support they need, they start to consider a change in affiliation.

The attorneys of Eccleston Law Offices represent investors and advisers nationwide in securities and employment matters. Our attorneys draw on a combined experience of nearly 50 years in delivering the highest quality legal services.

Related Attorneys: James J. Eccleston

Tags: Eccleston Law Offices, 2015, Financial Advisor, Broker Consolidation

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