Monday Headlines: Independent B-Ds Lose Superstar Names
Advisor superstars are souring on the independent broker-dealer business, according to Investment News.
Last week, Ric Edelman announced closure of its small independent-representative business, which affected 15 practices and 75 representatives. He pronounced his disenchantment with the industry:
"I consider the independent-broker-dealer channel severely flawed and question the sustainability of many of the players in the space.The economics are very challenging in today's environment. The economic structure of the independent-rep business makes it very difficult to operate a business profitably unless you have hundreds, if not thousands, of reps in the channel."
Edelman joins Ron Carson, who recently left his broker-dealer LPL Financial, and Adam Bold, who sold his majority stake in The Mutual Fund Store. Last month, Financial Strategy Network announced plans to sever ties with its broker-dealer, Raymond James, and instead use Pershing Advisor Solutions as its custodian. A partner, Jim Weil, explained: "Broker-dealers are better geared to individual producers instead of enterprises like we started, and they are generally not structured well to support the way in which RIAs, which is what we've become, conduct their businesses."
Citi is having trouble unloading EMI in the weak economy. [Financial Times]
HSBC will stop offering brokerage services to UAE retail investors and focus on institutional clients. [Bloomberg]
Mitsubishi UFJ Morgan Stanley will cut up to 1,300 jobs, or 20 percent of its workforce. [WSJ]
Money-market mutual funds are facing their biggest challenges since their 1971 inception. [Bloomberg]
State Street considers dumping its investment banking unit. [DealBook]
Citi's Q3 profit rose 74 percent on a $1.9 billion accounting gain. [Reuters]
Wells Fargo revenue dropped 6.2 percent. [WSJ]
Economic soothsayer says a Greek default could trigger a Lehman-magnitude shock. [Businessweek]
Six brokerage firms have dropped out of a recruitment pact designed to reduce litigation when advisors change firms. [Investment News]
Barclays is the sole lender of the $11.5 billion Kinder Morgan will borrow to buy El Paso Corp. in the biggest energy deal in more than a year. [Businessweek]
NBNK plans to compete with Virgin Money and the private equity firm JC Flowers in a 1 billion bidding war for state-owned bank Northern Rock. [Financial Times]