Faced with extreme margin compression, hundreds of broker-dealers closed their doors in 2011. One technology provider can help others avoid that fate.
In the first quarter of 2011 alone, 137 broker-dealers closed their doors (see Are the days of the small Broker-Dealer numbered?), leaving affiliated reps scrambling to find new broker-dealers for their support.
Since the onset of the Great Recession five years ago, broker-dealers as a whole continue to face anemic trading volume, declining ticket charges, and increasing regulatory costs. All these factors combine to put extreme pressure on profit margins, according to Atindra Barua, President and CEO of TrustFort, and technology and back-office service provider to financial companies.
I recently sat down with Mr. Barua and discussed what firms must do to fight margin compression and return to a cycle of growth and expansion. Here is the interview below.
the days are over for the small broker dealer–even if they break even or profitable——let a small dealer get a clearing from–there are 14 or so left in amercia—like chase–wells fargo–do you think they want a small broker dealer to clear thru them–some want 200 million in assets—monthly feels of 5 thousand to ten thousand a month– a small dealer can not pay that–the major banks and clearing firms have destroyed the investment industry—the broker dealers were the only ones to finance small companies—and forget the penny stocks under 5 dollars—after fina aggressive audits—clearing firms raising fees the small investor is gone from the mtk and will never return–why the FOUR PILLARS are gone taken over by the major banks—after 65 years in this industry I will never buy a stock as along as I live—-and the only one that can manage your money is you–no I am not broke—I am wealthy but when I see a industry i loved being destroyed and a firm i built for my grandkids gone i am sick—frank