NexusFi: Find Your Edge


Home Menu

 





might purchase a brokerage, need some info


Discussion in Brokers

Updated
    1. trending_up 1,271 views
    2. thumb_up 3 thanks given
    3. group 3 followers
    1. forum 2 posts
    2. attach_file 0 attachments




 
Search this Thread

might purchase a brokerage, need some info

  #1 (permalink)
 harryguy 
st. louis missouri
 
Experience: Intermediate
Platform: tradestation
Trading: futures
Posts: 60 since Jun 2014
Thanks Given: 31
Thanks Received: 25

.

Started this thread Reply With Quote

Can you help answer these questions
from other members on NexusFi?
Ninja Mobile Trader VPS (ninjamobiletrader.com)
Trading Reviews and Vendors
Better Renko Gaps
The Elite Circle
Exit Strategy
NinjaTrader
The space time continuum and the dynamics of a financial …
Emini and Emicro Index
ZombieSqueeze
Platforms and Indicators
 
Best Threads (Most Thanked)
in the last 7 days on NexusFi
Get funded firms 2023/2024 - Any recommendations or word …
61 thanks
Funded Trader platforms
44 thanks
NexusFi site changelog and issues/problem reporting
24 thanks
GFIs1 1 DAX trade per day journal
22 thanks
The Program
19 thanks
  #3 (permalink)
 
wldman's Avatar
 wldman 
Chicago Illinois USA
Legendary Market Wizard
 
Experience: Advanced
Broker: IB, ToS
Trading: /ES, US Equities/Options
Frequency: Several times daily
Duration: Hours
Posts: 3,507 since Aug 2011
Thanks Given: 2,046
Thanks Received: 9,491


but speaking here in generalities. The selling broker might not have authority to negotiate this. The brokerage firm, if there is one, or the clearing firm, even if the same as yours, may be the ultimate authority.

DO NOT EVER agree to any compensation model for this purchase that is not TOTALLY based on client retention and solely on the continued gross production from those clients. From a regulatory perspective you MUST have full licensing and maintain all appointments PRIOR to the assumption of clients. Also the retiring broker would have to maintain all licenses and appointments including continuing education for all registrations.

Structure the comp deal so that you get paid first and have NO or as little out of pocket or expense against cash flow. You will want the "new" clients in a joint rep number with the commission split done at the firm level. This way there is no tax issue or need for you to issue 1099's. Do not agree to pay the selling broker a % based on HIS trailing twelve. Insist on face to face conferences with the selling broker and the top 25% of the accounts. Make sure both spouses are present and get a commitment to transition the relationship at those meetings. Insist on reviewing BOTH the posting book and client account statements. Don't buy a book that is blown up or blowing up.

This is a relationship business, if you can not establish relationship as trusted adviser in the first year the deal is "off". Really best to do a transition year or two depending on the book and type of business.

Visit my NexusFi Trade Journal Reply With Quote




Last Updated on June 24, 2014


© 2024 NexusFi™, s.a., All Rights Reserved.
Av Ricardo J. Alfaro, Century Tower, Panama City, Panama, Ph: +507 833-9432 (Panama and Intl), +1 888-312-3001 (USA and Canada)
All information is for educational use only and is not investment advice. There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
About Us - Contact Us - Site Rules, Acceptable Use, and Terms and Conditions - Privacy Policy - Downloads - Top
no new posts