Friday, May 18, 2007

Branch Office Economics

A common phenonem in the retail brokerage industry is the hiring of top reps of one firm by the BOM of another. Otherwise known as a "raid", the practice seems to ebb and flow with the economy, as firms attempt to beef up the retain sales force.

My involvement in this disputes usually comes after the fact, when I am retained to represent the departing brokers, or the raiding firm, or the raided firm, and the focus is not on why the raid occurred, but dealing with the outcome. Who gets the customers, how do we protect our trade secrets, and who is going to pay how much to whom?

But Registered Rep has piece here on a different view of the practice - its all about economy of scale. An interesting read, but no real surprise - top producers are more profitable.
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