Broker-Dealer of the Future II, Part Three: Establish a Sound Economic Model

BNY Mellon's Pershing

11/05/2014

Broker-Dealer of the Future II, Part Three: Establish a Sound Economic Model

Ballooning bonuses, higher compliance costs and growing tech investments are squeezing margins to the limit. It's time to revisit the unit economics of each relationship to ensure everyone is on a sound financial footing.

The profitability of many broker-dealers is defined by their ability to deliver value to the advisors with whom they affiliate and charge a fair price for those services. Today, many broker-dealers are experiencing low profitability and a high volatility in their earnings—an economic model whose future is unclear. The Broker-Dealer of the Future will break this vicious cycle, establishing a sound economic model that regains control of the grid and creates profitable value-added services.

Stunning Transformation Three explores:

  • Pricing the Risk and Return on Equity
  • Managing the Grid
  • The Importance of Non-Grid Revenues

BNY Mellon's Pershing

BNY Mellon’s Pershing and its affiliates provide a comprehensive network of global financial business solutions to advisors, broker-dealers, family offices, hedge fund and ’40 Act fund managers, registered investment advisor firms and wealth managers. Many of the world’s most sophisticated and successful financial services firms rely on Pershing for clearing and custody; investment, wealth and retirement solutions; technology and enterprise data management; trading services; prime brokerage and business consulting.

Pershing helps clients improve profitability and drive growth, create capacity and efficiency, attract and retain talent, and manage risk and regulation. With a network of offices worldwide, Pershing provides business-to-business solutions to clients representing approximately 7 million investor accounts globally. Pershing LLC (member FINRA, NYSE, SIPC) is a BNY Mellon company. 

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