Frequently Asked Questions
What is
Broker Village?
Can
individual investors use this site or your services?
What
issues do your tools address?
Why do
you audit prospectuses and online tools?
Shouldn't
a CPA firm do the math-theory auditing work?
What
tools do you offer?
What's
with the name Black Cat Decisions?
What's
with the name Broker Village and the tag line?
Who are
your clients?
When did
the company start?
Who runs
the company?
What is
your corporate mission?
What is
your philosophy?
What is
a calculator?
Why
would a advisor or executive use a calculator?
How much
do the calculators cost?
Are
there potential compliance issues?
Who
helps advisors if they need help?
How long
does it take to get up and running?
Will the
information be saved?
Do you
produce custom software applications?
What
does your gear and cog logo represent?
Can
individual investors use your tools?
Do you
capture client information?
Do you
capture fund company or security-specific info?
What is Broker Village?
Broker
Village is an analytics and consulting firm. It is a division of Black Cat
Decisions, our holding company. We create decision-making tools and offer
consulting services to the retail financial services industry. The tools
help to analyze a firm's pricing policies and a financial advisor's book of
business. Should a B/D allow legacy trades to move to wrap accounts or a
financial advisor hire a sales assistant? As better decisions are made,
profits and net worth may rise and liabilities may fall.
Our tools and services are for executives, advisors, and
regulators. Executive-level tools display account value, total cost of
ownership, revenue, and advisor pay. Advisor tools display assets, pay, and
practice value. All tools can be customized and include consulting
services, sales material, training, and support. Results are extremely
accurate and often are audited by independent CPAs, a securities lawyer,
CTO, and CFA.
Here's what our graphics look like:
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Can individual investors use this site or your services?
Yes
and no. Our products and services are for financial service executives,
financial advisors, and regulators. If a firm that licenses our tools wants
to make them available to individual investors, it's OK with us. We will
not do so, however. Individual investors should not contact us because we
are not licensed to provide investment advice.
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What issues do your
tools address?
Compliance & Product Dev. Tools: Trade & Compliance Analyzer, 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
·
Evaluate the potential for
liability by selling DoL-Friendly Shares
·
Quantify account value loss,
and added cost, due to clean and T-shares
·
Evaluate the economic merits
of moving any client to an advisory account
·
Evaluate the corporate
prudence of moving select clients to advisory accounts
·
Evaluate conflicts of
interest at the point of sale and over time (and at other times)
·
Equalize pay so that a client
is indifferent between any two shares
·
Equalize pay so that a client
is indifferent between brokerage and advisory?
·
Help investors choose the
proper share class and avoid undue fees
·
Ensure that prospectus
suitability text is consistent with the math
·
Identify more quickly issues
of reverse churning (and fix them)
·
Identify a prohibited
transaction and assess if it actually makes sense to reverse
·
Create far more accurate prospectus
expense examples
·
Evaluate financial impact of
launching, closing, or re-pricing a fund
·
Create competitive advisor
pay scales without conflicts of interest
·
Create sales material more
quickly and accurately
Tools
for Recruiting Managers and Advisors: Recruiting and
Practice Valuation Tool
·
Create more competitive pay
packages to recruit advisors
·
Compare competing offers for the
same advisor
·
Evaluate offering a fixed payout to
a guaranteed production level
·
Project impact of an offer on
practice value at any future time
·
Evaluate how an advisor's sales mix
affects a firm's revenue
·
Determine optimum loan repayment
terms
·
Compare bonus options tied to
assets, retention, and production
·
Maximize the value of an
up-front check
·
Forge an optimal earn-out
arrangement
·
Evaluate how returns affect
pre- and post-tax income
·
See how
differentials in payouts affect net income and practice value
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Why do you audit prospectuses and online tools?
Load
fund prospectuses often contain math errors. Expense examples and
suitability text are particularly vulnerable. Call us to discuss this issue
or for a quick check of your firm's prospectuses.
We also
verify the accuracy of online tools and sales brochures. We cover mutual
funds, 401(k)s, IRAs, RMDs, and 529s. 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 math-theory auditing work?
No. In our
opinion, CPA firms are not well-suited for this type of intense
mathematical analysis. 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 CPAs and 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
hardcore mutual fund math. That’s us. Understanding the economics and
implications of their nuanced pricing profiles is required. Very few fund
and B/D executives have the requisite acumen. As a result, fee and
performance tables often are wrong. Suitability text is often misleading.
Textual discussions are often incomplete. Conflicts of interest
inadvertently are created.
To be very
granular, consider share class suitability. It 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.)
If you are a
senior executive at a fund firm or B/D, do you know why? If not, call us to
discuss this issue or for a quick check of the suitability profile of a
share class or wrap account. Due to the extreme sensitivity of these
issues, only a firm's senior executives should call us. Our number is
203-259-6700.
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What tools do you offer?
Three we sell actively (listed below). Several others --
mainly practice management tools -- are on hiatus for a while. Tools run on
the web or locally on a computer. Web tools generally are written in
JavaScript, C#, and/or HTML. We offer several boutique tools that are written
in EXCEL. Below are descriptions of the main tools.
1)
Trade and Compliance Analyzer
What is
the economic merit and corporate prudence of a trade?
This
risk assessment tool is for senior executives and financial advisors. It
can help a firm limit the potential for liability. With extreme accuracy,
it models fund and ETF trades in terms of account value, total cost of
ownership, and advisor pay. It handles traditional and clean shares, and
any mix of investor benefits like LOI, ROA, and free exchanges. Results
reflect fund- and account-level costs, like wrap fees.
Executives
can view trades through the eyes of investors, advisors, and regulators.
Quickly identify issues like conflicts of interest, reverse churning, and
prohibited transactions. As never before, you have the optics to see
problems and the tools to fix them. Use the Analyzer to set policies and
monitor advisor compliance with firm-level guidance. This tool helps
satisfy SEC due diligence requirements and the DoL’s
Impartial Conduct Standards. Results are audited. The
Federal Regulators License our Algorithms.
2)
Share Class Calculator
How does
fund pricing affect suitability and firm revenue?
Displays
ultra 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. The
Federal Regulators License our Algorithms and This Tool.
3)
Recruiting and Practice Valuation Tool
How do competing offers compare?
Evaluate
competing offers or create the most compelling one. This tool is for
recruiters and sales managers. It’s also for reps who take a check, forge
an earn-out, or sell-out completely. The tool displays gross and net
commissions, net-deal-worth, client assets, and practice value. It
considers loan terms, interest rates, forfeiture clauses, returns, client
acquisition and attrition rates, pricing profiles, before and after
pay-outs, deferred comp gained/lost, and revenue mixes (e.g., wrap fees,
commissions, planning fees, and insurance premiums). It also considers
costs for independent reps, like overhead, licenses, rent, and ticket
charges.
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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'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 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.
If an issue is of import, accuracy matters, and our firm can help. As a
friend once said: “Better to be in command of the math than a victim of
it.”
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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. We also work with
law firms, CPA firms, and other entities. Most contracts prohibit us from
listing the names on our site. Our clients are brand name Wall Street
firms. Currently, our tools and services are most popular with senior
executives at B/Ds and regulatory agencies.
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When did the company start?
Our holding
company, Black Cat Decisions, incorporated in June 2000, though we started
it a bit earlier.
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Who runs the company?
Nearly 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, banking, consumer packaged goods,
programming, systems architecture, and consulting.
At Broker Village, we have an explicit understanding of what it is like to
be a financial advisor, a decision-maker, and/or travel in the field as a
wholesaler. Several of us were – and are -- advisors, wholesalers, and/or
senior executives on Wall Street. That covers the money managements, mutual
fund, private investor, and hedge fund sides.
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What is your corporate mission?
Our mission is to be a 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, executives at fund firms and B/Ds, and federal
and state regulators. By using our tools, our clients should see an
increase in their sales and/or a reduction in the potential for 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 our tools demonstrate, small changes can lead to big
results. For example, with a small change to their sales mix -- and
without compromising clients in any way -- an advisor can increase
practice value by 25-50%. All they need is the "proof" to
convince them to take the required course of action.
With respect to advisor tools, we assume that advisors always
recommend appropriate products and services. Once determined to be
suitable, several pricing options may be available. An advisor should know
how their practice will be affected by the different options. Broker
Village, and our licensing firms, never suggest that an improper product or
service be sold to any client for any reason. Also, we assume that advisors
ALWAYS
effect transactions that are in concert with state and federal regulatory
guidance. A client’s best interests always come first. Period.
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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. 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. Profitability could rise and the
potential for liabilities fall.
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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 should
increase as might a firm's revenue.
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How much do the tools cost?
They are
affordable and available only on a master license basis. A license allows a
B/D to customize them to 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 info@brokervillage.com.
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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, and to the associated marketing and
training material, to accommodate the needs of a client.
The tools are best used in conjunction with a training module or
educational presentation. By themselves, the tools 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 tools part of an overall campaign that
helps full-service advisors to better serve their clients.
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Who helps firms and advisors if they need help?
For any license, we “train the trainer.” We support that
person or team through emails, phone calls, and visits. We are always there
for the trainer. To assist individual users, like advisors or investors,
the client firm does that work. Broker Village would prefer not to speak
with advisors and investors directly.
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How long does it take to get up and running?
It depends on the tool. Consider
the new Trade and Compliance Analyzer. You can go live almost immediately
with the Broker Village branded version. Your branded version and other
deliverables take a few weeks. One client went live one day after contract
approval. We provide onsite and online training to ensure that you’re fully
versed in how to use the tool.
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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.
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Do you produce custom software applications?
Yes
we do! Please contact us at 203-259-6700 or email us at info@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 individual investors use your tools?
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
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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