Excerpted from “Survival of The Fittest – Evaluating The Broker-Dealer Market and the New Financial Services Frontier”, by Frank LaRosa

The financial services industry is facing a contraction within itself based on both an economic and systemic evolution that will necessarily change how business is done. As with every evolution, it is the smallest and weakest which get eliminated, which is certainly a harbinger of things to come in the broker-dealer space.

Take first the economic evolution of financial services. The current crisis has spun the market into a carnival ride of chaos. Both the broker-dealer, advisor, and client suffer in equal measure in the current market scenario as market volatility impacts client portfolios, advisor compensation, and broker-dealer rep revenue simultaneously. Further, when considering the broker-dealer, the zero interest rate policies are hitting their revenue streams with a double negative as they are no longer in a position to make money on money market funds. 

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