It’s imperative that advisors who say they crave the feel and responsiveness of a smaller BD, perform an extra level of due diligence when choosing a small firm.
They need to dig into the financials and consider a prospective broker dealer’s excess net capital and profitability. (They may be required to sign a non -disclosure agreement to get this information.)
What’s to discover? Smaller broker dealers that don’t have abundant resources to survive the current regulatory climate, especially in fighting arbitration claims before FINRA.
Read more: Do Your Homework Before Joining a Small BD
