Frequently Asked Questions

What is Broker Village?

Can individual investors use this site or your services?

What issues do you 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, its financial condition, an investor's planning decisions, and a financial advisor's book of business. Should a B/D allow legacy trades to be moved to wrap accounts, a financial advisor hire a sales assistant, or a client refinance a mortgage? As better decisions are made, profits and net worth may rise and liabilities may fall.

Our tools and services are for executives, advisors, and investors (with an advisor). Some executive-level tools display account value, total cost of ownership, and advisor pay. Others display assets, income, and expenses. Advisor tools display assets and pay. Investor tools display pre- and post-tax wealth. 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, an independent?securities lawyer, a CTO, and a CFA.

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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 you address?

Tools for Compliance & Product Development Execs: Trade and Compliance Analyzer, Share Class Calculator

?span style='font:7.0pt "Times New Roman"'>         Model how various pricing structures affect a fund's competitive profile

?span style='font:7.0pt "Times New Roman"'>         Evaluate financial impact of launching, closing, or re-pricing a fund

?span style='font:7.0pt "Times New Roman"'>         Evaluate the potential for liability by selling ?span class=SpellE>DoL-Friendly?shares

?span style='font:7.0pt "Times New Roman"'>         Quantify?account value loss, and added cost, due to clean and T-shares

?span style='font:7.0pt "Times New Roman"'>         Evaluate the economic merits of moving any client to an advisory account

?span style='font:7.0pt "Times New Roman"'>         Evaluate the corporate prudence of moving select clients to advisory accounts

?span style='font:7.0pt "Times New Roman"'>         Evaluate conflicts of interest at the point of sale and over time (and at other times)

?span style='font:7.0pt "Times New Roman"'>         Equalize pay so that a client is indifferent between any two shares

?span style='font:7.0pt "Times New Roman"'>         Equalize pay so that a client is indifferent between brokerage and advisory?

?span style='font:7.0pt "Times New Roman"'>         Help investors choose the proper share class and avoid undue fees  

?span style='font:7.0pt "Times New Roman"'>         Ensure that prospectus suitability text is consistent with the math

?span style='font:7.0pt "Times New Roman"'>         Identify more quickly issues of reverse churning (and fix them)

?span style='font:7.0pt "Times New Roman"'>         Identify a “prohibited transaction?and assess if it actually makes sense to reverse

?span style='font:7.0pt "Times New Roman"'>         Create far more accurate prospectus expense examples

?span style='font:7.0pt "Times New Roman"'>         Evaluate financial impact of launching, closing, or re-pricing a fund

?span style='font:7.0pt "Times New Roman"'>         Create competitive advisor pay scales without conflicts of interest  

?span style='font:7.0pt "Times New Roman"'>         Create sales material more quickly and accurately

Tools for Sales & Finance Executives: Profitability Analyzer, B/D Recruiting Tool

?span style='font:7.0pt "Times New Roman"'>         Evaluate how a new sales strategy affects revenue and expenses

?span style='font:7.0pt "Times New Roman"'>         Determine how changes in product pricing affect revenue

?span style='font:7.0pt "Times New Roman"'>         Evaluate how market returns affect pre- and post-tax income

?span style='font:7.0pt "Times New Roman"'>         Determine how entering a new market affects net income

?span style='font:7.0pt "Times New Roman"'>         See how differentials in B/D payouts affect recruiting efforts

?span style='font:7.0pt "Times New Roman"'>         Create more competitive pay packages to recruit advisors

  Tools for Advisors: Product Mix, Convert Assets, & Lump Sum Calculators

?span style='font:7.0pt "Times New Roman"'>         Move new or existing dollars to fees

?span style='font:7.0pt "Times New Roman"'>         Work the back of a book

?span style='font:7.0pt "Times New Roman"'>         See how product fees affect assets and pay

?span style='font:7.0pt "Times New Roman"'>         Hire a sales assistant

?span style='font:7.0pt "Times New Roman"'>         Partner with another advisor

?span style='font:7.0pt "Times New Roman"'>         Eliminate unproductive accounts

?span style='font:7.0pt "Times New Roman"'>         Value a practice to buy or sell  

?span style='font:7.0pt "Times New Roman"'>         Evaluate a recruitment offer  

?span style='font:7.0pt "Times New Roman"'>         Compare different annuity or fund payouts

 Tools for Investors: Mortgage Calculator, College Savings Calculator

?span style='font:7.0pt "Times New Roman"'>         Evaluate the threshold refinance rate on a mortgage

?span style='font:7.0pt "Times New Roman"'>         Evaluate how income level affects the merits of a refi

?span style='font:7.0pt "Times New Roman"'>         Compare refinancing savings to the return on any investment

?span style='font:7.0pt "Times New Roman"'>         Evaluate net investment of any college savings strategy

?span style='font:7.0pt "Times New Roman"'>         See how filing status affects the merits of a college savings strategy

?span style='font:7.0pt "Times New Roman"'>         Determine effect of a college savings strategy on estate value

?span style='font:7.0pt "Times New Roman"'>         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 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. Textural 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?

There are at least ten. They 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 HTML 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 ?span class=SpellE>DoL-friendly? 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 advisors?compliance with firm-level guidance and procedures. 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 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. The Federal Regulators License our Algorithms and This Tool.

3) 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.

4) 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.

5) 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.

6) 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.

7) 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.

8) 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.

9+) Other Tools:

Value My Practice, Portfolio Analyzer, B/D Recruiting Analyzer, Partner Up, and others.

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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 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. As a friend of the firm once said: “Better to be in command of the math than a victim of it.?/span>

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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. 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 B/Ds and regulatory agencies.

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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?

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.

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, 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 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. Also, we assume that advisors ALWAYS effect transactions that are in concert with state and federal regulatory guidance and rules. A client’s best interests always should 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. 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. Profitability could rise and the potential for liabilities fall. 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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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 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 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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How long does it take to get up and running?

It depends on the tool. Let’s consider the new Trade and Compliance analyzer. You can go live almost immediately with the BV-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. 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 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. 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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