How Do BDs Survive the Squeeze of More Industry Regulations and the Need to Control Expenses?

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Founder Jack Cramer

Key Takeaway:  More Outsourcing and More Regulations Means More DDW

We know 2 things for sure in 2023. 

1. The Regulatory environment will continue to become more challenging for BDs. 

2. Broker-Dealers' desire to lower expenses (or bring predictability to their cost structure) will continue. 

1. The Regulatory environment will become more challenging for these reasons. 

First, the regulators are moving from education to enforcement. That means the threat of fines will now turn into the assessment of fines. This shift was inevitable but that doesn't make it any more pleasant. 

Second, regulators are leaving their swim lanes and inserting themselves into areas where you wouldn't expect them. And there isn't much that can be done to stop them because they are wearing the white hat. (Their goal is to protect consumers and the industry which makes it difficult to argue that they should stay in their lane.) For example, when it comes to Rollovers, the DOL is the first regulator that comes to mind, but the SEC is interested in Rollovers because Account Type selection is involved and that impacts the Best Interest Regulation. So now you have to be prepared for questions about Rollovers from both the DOL and the SEC. 

2. The need to lower expense or bring predictability to your cost structure will remain a focus. 

Running a Broker-Dealer has never been for the faint of heart, but even our current generation of bold leaders has their hands full. Advisors want higher payouts and more technology. COOs want more money to upgrade technologies. CCOs want more resources for compliance and supervision. And addressing new regulations means hiring more people or paying for more technology. That's a daunting challenge for even the most experienced leaders. 

The Silver Lining: DDW can help you solve for new regulations with a predictable cost structure. (And likely update and upgrade how you meet new regulations.) 

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JackCramer1SquareFor more information about the author DDW's products and services, contact Jack Cram

303.532.7003 |


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