Tools for Sales & Finance
Executives:
Profitability Analyzer, B/D
Recruiting Tool
·
Evaluate
how a new sales strategy affects revenue and
expenses
·
Determine how changes in product pricing affect revenue
·
Evaluate how market returns affect pre- and post-tax income
·
Determine how entering a new market affects net income
·
See how differentials in B/D payouts affect recruiting efforts
·
Create more competitive pay packages to recruit advisors
Tools for Compliance & Product Development
Executives: Share Class Analyzer
·
Model how various
pricing structures affect a fund's competitive profile
·
Evaluate financial
impact of launching, closing, or re-pricing a fund
· Help
investors choose the proper share class and avoid undue fees
· Ensure
that prospectus suitability text is consistent with the math
· Create
far more accurate prospectus expense examples
· Create
competitive advisor pay scales with
out conflicts of interest
·
Create sales material more quickly and accurately
Tools for Advisors: Product Mix, Convert Assets,
& Lump Sum Calculators
· Move
new or existing dollars to fees
· Work
the back of a book
· See
how product fees affect assets and pay
· Hire
a sales assistant
· Partner
with another advisor
· Eliminate
unproductive accounts
· Value
a practice to buy or sell
· Evaluate
a recruitment offer
· Compare
different annuity or fund payouts
Tools for
Investors: Mortgage Calculator,
College Savings Calculator
·
Evaluate
the threshold refinance rate on a mortgage
·
Evaluate
how income level affects the merits of a refi
· Compare
refinancing savings to the return on any investment
· Evaluate
net investment of any college savings strategy
· See
how filing status affects the merits of a college savings strategy
·
Determine
effect of a college savings strategy on estate value
·
Evaluate the effect
of asset allocation on account value
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Why do you audit
prospectuses and online tools?
Load fund prospectuses often contain math
errors. Expense examples, share class sales limits, and suitability text are particularly vulnerable.
Call us to discuss this issue or for a quick check of your firm's prospectuses.
Due to the extreme sensitivity of the issue, only a firm's senior
executives should call us. Our number is 203-259-6700.
We also verify the
accuracy of online tools and sales brochures. They cover 401(k)s, IRAs, RMDs, 529 plans, and mortgages.
Commonly, returns and expenses are improperly accrued, CDSCs are
miscalculated, and textual rationales are in error. In our opinion, most of them -
particularly those offered by fund firms and B/Ds - are in need
of a serious review.
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Shouldn't a CPA firm do the auditing and verification work?
No. In our opinion, CPA firms are not well-suited for this type of analysis, including the Big Four. A CFA or math PhD
-
with a background in mutual fund product development
- is required.
We have two such folks on staff.
The issues have nothing to do with a
fund's audited financials, such as the income statement, balance sheet, capital transactions, etc. Those
important elements are the rightful purview of the big accounting firms. Discussions of risk and how a fund operates also are extremely important. They are the purview of the legal and compliance departments.
Then
there is the hardcore math. For several reasons, fee and
performance tables often are wrong. Next, share class
suitability can be a function of the characteristics of
the securities owned at the portfolio
level. Buying Cisco (CSCO) over Chevron (CVX) can affect which share is best for investors. (It also affects
firm revenue.) Call us to discuss this issue
or for a quick check of the suitability profile of a share class.
Due to the extreme sensitivity of the issue, only a firm's senior executives
should call us. Our number is 203-259-6700.
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What tools do you offer?
There are at least ten that we offer. They run on the web or locally on a computer. They are written in JavaScript and HTML. We do offer several boutique tools that are written in EXCEL.
Below are descriptions of the main HTML tools.
1) Share Class Analyzer
– How does fund pricing affect suitability and firm revenue?
Displays very accurate account values, fees, advisor pay, and revenue for any class of a
fund. Handles any investment, breakpoint, CDSC, return, expense ratio, cost of
capital, or B-A “flip.” Investors can pick the best share. Financial advisors can evaluate
their pay. CFOs can see how pricing affects revenue. Compliance officers can spot
conflicts-of-interest and create much more accurate prospectus expense examples. Results are audited.
2) Profitability Analyzer
- How do advisors' sales decisions affect firm profits?
Evaluates the economic impact to a B/D of advisor decisions: move to fees, sell a certain
share class, sell insurance, etc. Displays assets, gross pay, net pay, and GAAP-consistent financial statements. It handles almost any product, number of
advisors, payout, fee schedule, sales mix, and return.
3) Convert Assets Calculator
- Should an advisor work the back-of-a-book?
Determines impact of converting any part of the "back-of-a-book"
assets to fee- or load-based
products. Handles any returns, payout, assets, valuation factors, and most
products. Displays assets, gross and net pay, and practice value. For example,
it evaluates converting 25% of such assets to C-shares that pay 1%/yr.
4) Product Mix Calculator
- How does a sales mix affect assets, pay, and practice value?
Evaluates how changing a future sales mix affects assets and pay. Handles any returns, fee schedule,
payout, book of business, and most products. Displays assets, gross and net
pay. Practice value is derived from the results. For example, it compares
moving $5 million in sales from A-shares to C-shares and annuities.
5) Lump Sum Calculator
– How do prices and return affect assets and pay?
Evaluates how a single trade affects assets and pay. A book of business is not
modeled. Advisor assets and pay are displayed for different sales mix, pricing, or return scenarios.
Compare, for example, an annuity paying 6% and no trail to one paying 4% and a 0.5% trail.
It handles any returns, fee schedule, and most products.
6) College Savings Calculator
– What is the best way to save for college?
Analyzes almost any college savings strategy. Displays pre-
and post-tax wealth, net of state and federal tax! Handles almost
any account type (529, UGMA, Roth, ESA, annuity, etc.),
underlying investment, contribution, return, fees, income level, and
tax rate. Results are audited.
7) Mortgage Calculator
– Should a client refinance and how is a firm affected?
Compares the savings of a mortgage refinance to the return
on any investment. Often, a refi is the best “investment.”
Clients should refi for a far smaller interest rate savings than they’d
expect. Reinvested savings are modeled. Handles almost any rate,
term, reset, return, tax rate, CPI, and residency.
Results are audited.
8+) Other Tools: Value My Practice, Portfolio Analyzer, B/D Recruiting Analyzer, Partner Up, and others.
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Is Broker Village associated with iVillage?
No. There is no association.
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What's with the name Black Cat Decisions?
On the day the three founding families met to name the company, we realized that we all had black cats as pets. (Is that a good sign or a bad sign?)
We wanted the word "decision" in the name. That's because our software helped people make better decisions. Hence, the name of our holding company was born: Black Cat Decisions.
Stu and Alicia's cat,
Blackcomb (named after the ski mountain), was black cat number
one. Mike and Sandra's black cat was number two. Eric and
Debbie's black cat was number three.
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What's with the name Broker Village and the tag line?
Fittingly, a high producing Prudential Securities Financial Advisor suggested the name. Our name aptly conveys this sentiment: Full-service advisors
(or "brokers") help families in very meaningful ways. With an advisor by their side,
clients are more likely to achieve their financial goals: retiring earlier, sending a child to the school of their choice, buying a nicer house, increasing
their wealth, protecting that wealth, or leaving more to charity.
Our tag line is "Broker Village: When the math
matters." Applying solid math to business issues allows firms and individuals to make better
decisions. Our math is very solid. Therefore, if an issue
is of import, accuracy matters, and our firm can help.
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Who are your clients?
Clients mainly are broker/dealers, federal regulators, and investment firms, like mutual fund, annuity, insurance, and managed money firms. To a small degree we work
with law firms, CPA firms, and other entities.
Most contracts prohibit us from listing the names on our site but, if you call us, we can tell you. Our clients are brand name Wall Street firms. Advisors are the ultimate users
of about half of our tools. In rare cases they purchase tools from us directly.
Currently, our tools and services are most popular with senior executives at fund firms and B/Ds.
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When did the company start?
Our holding company, Black Cat Decisions, incorporated in June 2000.
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Who runs the company?
As of 2008, over twenty people associate with us on a full-time, part-time, or investment basis.
Several of us come out of senior positions on Wall Street. We are all professionals with a lot of experience in our respective industries. Those industries cover financial services, consumer packaged goods, banking, programming, systems architecture, and consulting.
Decisions at Broker Village are made with the explicit understanding of what it is like to be a financial advisor and/or travel in the field as a wholesaler. In fact, several Management Committee members were advisors, wholesalers, and/or senior executives on Wall Street. Several owners and financial backers were, and are, successful money managers, on the mutual fund, private investor,
and hedge fund sides
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What is your corporate mission?
Our mission is to be the premier provider of decision-making tools to the retail financial services industry. Our approach is to help investment
firms work more efficiently and objectively. Users of
our tools may be financial advisors or executives at fund firms
and B/Ds. By using our tools, our clients should
see an increase in wealth and/or a potential reduction in liability.
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What is your philosophy?
Our underlying philosophy is that financial executives, advisors, and investors can make decisions that are more
objective and, thus, more profitable. With no easy way to evaluate the long-term results of a decision, they often do what comes easy.
As the calculators demonstrate, a small change can lead to big
results. For example, with a small change to their business model, pricing, or sales mix,
an advisor can easily increase their annual compensation by 25-50%. All they need is the "proof" to convince them to take the required course of action.
With respect to full-service advisors, we totally support their efforts. Moreover, the name Broker Village aptly conveys this sentiment: full-service advisors help families in very meaningful ways. With an advisor by their side, clients are more likely to achieve their financial goals: retiring earlier, sending a child to the school of their choice,
buying a nicer house, increasing their wealth, protecting that wealth, or leaving more to charity.
With respect to our advisor tools, we assume that advisors always recommend the appropriate products and services to clients. Once
determined to be suitable, several pricing options may be available. A financial advisor
should know how their practice will be affected
by the different options. Several calculators provide that ability. Broker Village, and our licensing firms, never suggest that an improper product or service be sold to any client for any reason.
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What is a Calculator?
Calculators are unique software tools. Advisor tools display assets and pay for any sales mix, returns, fee schedule, or payout.
Investor tools show pre- and post-tax wealth. Executive
tools can compare current and proposed business models. Results print, save, and display in graph and table form. These customized tools include sales ideas, PowerPoints, training, and
support.
Advisors can determine the effects of a decision before committing to a
course of action. With better decision-making abilities, their productivity should improve. Firms
can make better decisions about the products they offer and
markets they enter. That could lead to higher sales. Investors can make more confident and objective
decisions. Hopefully, that leads to more wealth.
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Why would an advisor or executive use a calculator?
The calculators make their life easier. They can model the financial results of a business decision (like
an advisor converting from commissions to
fees or a firm re-pricing a share class) before committing to a particular course of action. Hence, an advisor's productivity (i.e., commissions) should
increase as should a firm's revenue.
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Have advisors seen the calculators?
Yes. As of 2012, thousands of advisors and managers have seen one version or another. 99% of them loved the calculators and had never seen anything like them before.
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How much do the calculators cost?
They are very affordable and available only on a master license basis. A license allows a fund firm or B/D to customize the calculators so
they reflect their brand: default values, sales ideas, logo, colors, fonts, etc. Generally, we do not sell to individual advisors. To discuss a license, call us
at 203-259-6700 or email stuspeckman@brokervillage.com.
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What do the broker/dealers think?
Firms that have seen the calculators like them. So far, there are no complaints of any sort.
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Are there potential compliance issues?
Any firm that licenses a calculator should ensure that they meet the requirements of their legal departments. Broker Village
will make any reasonable changes to the software to accommodate the legal needs of a client firm.
Our feeling is that the calculators are best used in conjunction with a training module or educational presentation. By themselves, the calculators do not convey the proper perspective. An advisor never should make an investment recommendation to a client based solely on their compensation. Hence, Broker Village strongly urges all client firms to make the calculators part of an overall campaign that supports the efforts of full-service
advisors and helps them work with clients more effectively.
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Who helps advisors if they need help?
Once a firm licenses a calculator, they "own" it. Thus, they are responsible for training and support of the financial advisors if the tool is meant for advisors. In this regard, Broker Village would prefer not to speak with advisors
directly. Broker Village will "train the trainer" at XYZ fund company or PDQ broker/dealer. It is XYZ's or PDQ's
responsibility to support the advisors that access the calculators. However, if an XYZ
or PDQ person has a question, they can call or email us, especially if there is technology concern.
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Will the information be saved?
Yes and no. Some tools have a save feature and others do not. For those that do, while a session is live, information is saved. There is a save button, but it must be clicked; nothing saves automatically. Further, some calculators
transfer information to other ones. For example, if you enter $500,000 for Gross Commissions in the Convert Assets Calculator, when you open the Product Mix Calculator, that $500,000 already is there. If you do not click save, once you
close out of the calculators, the information is lost. Once the tools reopen, the default values appear, not your personal entries.
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Do you produce custom software applications?
Yes we can, but we usually don't. Please contact Stu Speckman at
203-259-6700 or email him at stuspeckman@brokervillage.com.
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What does your gear and cog logo represent?
Our logo is a rendition of the mechanism that was a central component of the very first calculators. Thus, it represents our product line: the "Calculators."
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Can I access Broker Village from the road?
Yes. You can access us from anywhere. The faster the connection, the better.
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Who handles your legal work?
Four firms, actually. The lead firm has been Fulbright & Jaworski (www.fulbright.com). One of the largest U.S. law firms, they have over 750 attorneys and offices worldwide. From patents, to copyrights, to financing issues, a team at F&J has guided our efforts flawlessly. Ken P., now of Jones Day (www.jonesday.com),
helps with contracts and investment issues. He has been invaluable to us for he also serves as a business advisor. Patricia Foster of
private practice ably assists with share class issues and opinion
letters. Finally, Fross Zelnick Lehrman & Zissu (www.frosszelnick)
helps on 529 IP issues, though that tool is owned by another
firm.
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Who handles your financials?
Caposella, Cohen, LLC, handles our financial and accounting work (www.capossela.com). They are a well-regarded CPA firm based in Southport, CT. They have about 30 professionals, mostly CPAs, and specialize in LLCs, which is how Black Cat is structured. Capossela is part of one of the biggest
accounting and consulting firms in the world: BDO
Siedman. BDO is currently ranked number five. The Capossela crew
has been called upon many times to help review the coding for the application of sound mathematical theory and, of course, the generation of accurate results.
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Can advisors show this site to individual investors?
No and yes. Our products are for financial advisors and financial service executives. If an advisor or firm that licenses our tools wants to make them available to individual investors, it's OK with us. We will not do so because we are not licensed to provide investment advice. All risk and liability is on the shoulders of the firm or investment advisor, not us.
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Do you capture client information?
No. No client information of any type is ever captured by our products.
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Do you capture
company specific info?
No. No company-specific information is ever captured by Broker Village. For example, if an
advisor sells XYZ Funds, Broker Village never knows.
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