A new study from Pershing LLC asserts that investment advisors can potentially double profitability, boost productivity and extend client relationships by converting from direct business with fund complexes and annuity providers to a consolidated brokerage platform.
The report, Asset Consolidation: Your Path to Greater Growth and Efficiency, was released today and developed with FA Insight.
"Too often investment professionals aren't getting a complete picture regarding the advantages of consolidating assets on a brokerage platform, which explains why direct trading continues to make up 50% of the dollar volume of trades and 66% of the number of trades made by independent broker-dealers," said Dan Inveen, Principal at FA Insight.
According to the study, the key benefits of consolidating to a single brokerage platform include:
* Eliminating direct business practices saves time and money. FA Insight estimates direct trading costs for a typical investment professional exceeds $50,000, or 20% of an advisor's total practice revenue.
* A consolidated platform creates efficiencies that translate directly to significantly greater productivity by enabling advisors to spend less time on operations and more time on business development.
* With assets consolidated on the brokerage platform, commission and 12b-1 processing is automated for potentially faster payment and improved cash flows.
* Consolidation onto a single brokerage platform improves compliance by limiting the potential for error and reducing market risk associated with delayed executions.