Tools for Compliance & Product Development Execs: Trade and Compliance
Analyzer, Share Class Calculator
· Quantify account value
loss, and added cost, due to clean and T-shares
· 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
· Evaluate the economic
merit of moving any client to an advisory account
· Evaluate the corporate
prudence of moving select clients to advisory accounts
· 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 makes sense to
· Create more accurate
prospectus expense examples
· Create sales material
more quickly and accurately
Tools for Recruiting Execs and Advisors: Recruiting &
Practice Valuation Tool
more competitive pay packages to recruit advisors
competing offers from three firms simultaneously
offering a fixed payout to a guaranteed production level
the impact of an offer on practice value at any future time
how an advisor's sales mix affects a firm's revenue
optimum loan repayment terms
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
Tools for Advisors: Product Mix, Convert
Assets, & Lump Sum Calculators
new or existing dollars to fees
the back of a book
how product fees affect assets and pay
a sales assistant
with another advisor
a practice to buy or sell
a recruitment offer
different annuity or fund pay options
1) Trade &
Compliance Analyzer – What’s
the economic merit of a trade?
View fund trades through the eyes of investors, advisors, and
in advance if account value is maximized, cost is
minimized, and conflicts are eliminated. In an arbitration, know in advance if the
math supports your trade or if the opposing claim has merit.
!vml]><![endif]><![endif]>With extreme accuracy,
it models trades in terms of account value, total cost of ownership, and
advisor pay. It handles traditional and clean shares, and any mix of
benefits like LOI, ROA, and free exchanges. Results reflect fund-level and
account-level costs, like wrap fees.
Use this tool to
satisfy SEC due diligence, disclosure, and documentation requirements under
Regulation Best Interest. Set policy and monitor advisors’ compliance
with firm-level guidance. Quickly identify conflicts of interest,
prohibited transactions and cases of reverse churning. Results are audited. Federal
Regulators License THE Algorithms.
Share Class Analyzer - How does
fund pricing affect suitability and revenue?
The federal regulators license this tool. It calculates account values,
fees, advisor pay, and revenue for any class of any fund. Handles any
investment, breakpoint, CDSC, return, fees, cost of capital, or B/A flip.
Investors can pick the best share. Financial advisors can estimate their
pay. Boards can evaluate a firm's liability. CFOs can see how pricing
affects revenue. Compliance officers can spot conflicts-of-interest and
create more accurate prospectus fee examples. Audited by independent
CPAs and a securities lawyer.
3) Convert Assets
Calculator - Should an
advisor work the back-of-a-book?
Determines the effect of converting any part of the
"back-of-a-book" to fee- or load-based products. For example, it
evaluates converting 25% of these assets to managed money paying 1.5%/yr.
It handles any returns, B/D payout, book-of-business, valuation factors,
and many products. Gross and net commissions display as well as practice
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) Recruiting and
Practice Valuation Tool - How do
competing offers compare?
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 the costs for independent
reps, like overhead, licenses, rent, and ticket charges.
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