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.