Matt Lynch on the Mounting Pressure for IBDs

January 30, 2016

What value will independent broker/dealers be able to offer their advisors in a post-Department of Labor fiduciary world? Even without the regulatory changes, market realities such as different and increasing advisor and consumer expectations, as well as advancing technology—have forced IBDs to up their game, said Matt Lynch, managing partner of Strategy & Resources LLC.


“IBDs that simply maintain accounts, provide compliance, process trades, etc., are not adding sufficient value and are feeling the squeeze of margin compression more acutely,” Lynch said. For most IBDs, over 50 percent of their business is already fee-based, so that change has already been factored in to most successful IBD business models.


IBDs who are best positioned to weather the storm are those that can demonstrate they help advisors achieve their goals (profitably growing their practices), Lynch said.  “Those whose affiliation proposition is limited to fulfilling the regulatory requirement that a rep has to be registered with a broker-dealer…are likely facing extinction,” he added.


Read full article:

The Pressure is Mounting for IBDs
By Megan Leonhardt,, Jan. 28, 2016



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