It was recently announced that HBW Partners, an Independent broker dealer with 55 Independent advisors is moving to Cetera Advisor Networks.
Founded in 1991, HBW Partners is located in Simi, CA and managed $820 Mill. in assets.
The move was motivated by a desire to “keep the most-beloved features of our firm while eliminating the surging regulatory burdens associated with being a broker-dealer,” said Barney Hellenbrand, HBW’s chief executive.
This broker dealer consolidation trend is nothing new. The industry has seen a dramatic decrease in the number of Broker Dealers in the space.
According to Finra, five years ago there were 4,456 broker dealers compared to where the industry is today at approximately 3,869 firms. That is a drastic reduction.
Broker dealers are having a more difficult time keeping up with the cost of regulatory changes, increased demand for expensive technology enhancements all while dealing with continuously squeezed profit margins.
This makes it all the more important for advisors who are considering a broker dealer change to do due-diligence to make sure you are going to a firm that has longevity in the business.
Ask the questions-
1) Who owns the broker dealer?
2) Are they well positioned financially?
3) Are they investing back into the bd so that they remain competitive and are able to grow?