New usability study reveals IR websites score really low

Jakob Nielsen has been writing about web usability since time immemorial (or at least, 1996).  I frequently recommend anyone thinking about writing for the Web, sending marketing emails or designing websites to sign up for his weekly alertbox at (For another oldie, yet goodie, I typically include a suggestion to check out Philip and Alex’s Guide to Web Publishing, as well).

Nielsen’s Nielsen Norman Group conducts usability reviews and puts on conferences for a variety of different fields.  So, it’s when Nielsen comments on Investor Relation websites, I take note.  You should, too.

In a post today, entitled Investor Relations (IR) on Corporate Websites, Nielsen reveals the results of usability studies his firm conducted on 52 different company websites (there are some very recognizable names in this list).

For the study, Nielsen looked at 4 types of users (3 professional, 1 non-professional):

  1. institutional investors
  2. financial analysts
  3. journalists
  4. individual investors

The Usablility Guru’s takeaways for most IR websites?

  • professionals don’t rely on a company’s own website for financials: As a professional investor, I rarely surf to a corporate website to retrieve data.  That I get from Bloomberg, Reuters, CapIQ or even, Yahoo Finance.  I do use corporate websites to access company presentations (see next point) or for small caps with little other information accessible publicly.
  • professionals do like company spin in as much as it weaves an investment story or thesis: Most financial data is easily available through other aggregated sources which allow investors to run quick calculations or valuation analysis.  Instead, professional investors use corporate IR sites to get a gut-check on the company, browse recent presentation.  Here, institutional investors are looking for context, not data.
  • individuals actually read very little text on IR websites: Using eyeball tracking studies, Nielsen concluded that individual investors don’t actually read all that much online.  This jives with Nielsen’s thesis that web users in general have different consumption habits when it comes to information.
  • PDFs may be an easy way to post content but stink because they were developed for print: PDFs allow corporations to easily post financial communications to the web but because they were developed for print, the format requires readers to flip through the document aimlessly.  People don’t read this way online.
  • webcasts gaining popularity but suffer from being too long and a lack of descriptive information regarding their contents: More and more companies are using a video format to post financial communication but according to Nielsen, “[users] like shorter videos to get a sense of who the executives are through facial expressions, tone of voice, body language, and so on.”
  • PowerPoint still works!: Although developed as an offline presentation method, users are still receptive to downloading and reading PowerPoint presentations versus watching video.  As one user said, “This video is 28 minutes long. I spent only 5 minutes to go through [the slides]. If possible, do a separate online presentation. Make the online version easier to understand — shorter.

Given the findings, I’d like to enumerate 10 suggestions (including some of  Nielsen’s own) to make IR activity more successful (providing the right information in the right format, useful to investors):

  1. PDF doesn’t work for financial communication.  Use a more flexible, web based presentation technology like SlideShare.
  2. Design IR websites with both institutional and individual investors in mind. They have different needs.  Accommodate both.
  3. Free your content.  Take video, PDFs, and PowerPoint presentations and upload them to YouTube, Scribd, and SlideShare.  These formats overlay real web usability to make these formats more accessible to investors.  YouTube even has basic annotation functions to bookmark important sections of video to enable users to skip around.
  4. Since users don’t read online, IR websites can improve usability by making it easier for users to find things.  Chop up text.  Use bold and italics judiciously.
  5. Weave an investment thesis.  Don’t think that investors can do this on their own.  Write the web copy to help promote the story behind your stock.
  6. Stock charts are helpful, but they need to be simple to use and easy to understand.  Consider using an embedable, annotated chart like these.
  7. Get CEOs out from the corporate boardroom and conducting interviews in public.  Investors really use these as an input in their investment decisions.
  8. Tap the blogosphere by making your company’s information easy to find and easy to share.
  9. Consider getting a video editor to chop up presentations into 3 minute chunks.
  10. When you post video, make sure that there is a clear description of what the user should expect to see by watching it.  Time is precious and you must convince browsers that watching your videos is worth their time.

Additional Resources


Wither financial guidance when we need it most

I’m going to go out on a limb here and say that this financial crisis was totally avoidable.

No, not the popping of the Greenspan debt bubble — that was inevitable — but the slamming of the stock market in its wake.  This recession and destruction of financial firms was certainly probable – if not likely – and it caught most publicly traded companies completely off guard.

Financial advisors are paid to manage portfolios for any eventuality (hopefully).  If there is an X% chance of Y happening, the portfolio should take this into account and reflect a particular stance.

So, too, Investor Relations.

Financial communications to investors should be managed with the same risk management that people managing investments employ. There’s too much finger-pointing, sitting on hands and pulling back in financial communications — especially during these crazy times.

Ultimately, all this means that investors are left holding the proverbial bag — and the bag is certainly a lot less full than it was 12 months ago.  And what’s worse is that companies are retracting their lifeline with the investing public just when we need it most.

The National Investor Relations Institute (NIRI) does periodic polling of their constituents.  Check out its press release (.pdf) published yesterday.

Couple of salient data points:

  • 60% of respondents provide earnings guidance compared to 64% in 2008.
  • The primary reason cited for ceasing earnings or other financial guidance within the last 12 months was due to a change in visibility / forecasting ability of business. (emphasis mine)

While a 6+% year-over-year drop in companies offering earnings estimates is not catastrophic, it’s not encouraging either, especially giving its timing.  It certainly is harder to communicate guidance during tumultuous times because guidance becomes so much harder to gauge.  But the same NIRI survey also shows there’s been a pullback in all types of guidance, including non-financial guidance.

With banks cutting their research staff, newspapers going under, and ad-supported financial content having a harder time of it, investors are left with at least one traditional, valuable source of information — companies themselves.

It really is an opportunity for companies to distinguish themselves by providing straight information, timely communications and no-nonsense bull.  Investors deserve it.

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How will investors behave with no newspapers?

stock quotesSlow death of the newspaper and how investment decisions are affected

While news and the proliferation of information is booming, clearly the newspaper industry is on its way out.  Its current revenue model just can’t support a quality newsroom in the face of widely available free information on the Internet.

Numerous industry analysts continue to discuss the evolution of the news business (see Jarvis and Rosen as two of the best) but no one seems to be discussing the fact that beyond local news,  many investors who are less Internet savvy still receive much of their investment ideas/information from the old-school paper.

Older investors disproportionately hurt

While my 96 yr. old grandfather learned how to use Yahoo Finance before his death two years ago, I think older investors are hurt the most  by the demise of the paper.

This affects more than just getting stock quotes from your local Sunday edition.  This is about generating new ideas and monitoring stocks in existing portfolios.

Given the fact that we know investors are totally prone to home bias, that is over investing in domestic and even local firms in spite of knowing that investing more abroad lowers risk, the loss of a local paper can be really detrimental in both the discovery and analysis phases of investing.

5 things that need to happen for investors in a post newspaper world

I wanted to use this post to explore some ideas how investors can make better, more informed investment decisions in a post-newspaper world.

  1. More Internet consumption: I know this sounds so intuitive but there really has never been anything to compete with the level of breadth and detail on stocks, mutual funds and ETFs that the free Internet offers.  We have to help investors migrate away from newspapers as sources of financial information and hook up to their digital counterpart.  This is happening anyway as younger generations cut their teeth on Internet tools but we’re still a long way away from general literacy in using financial tools on the Internet.
  2. Financial tools education: This will require new sorts of financial education on how to use such tools.  This education should address both older investors who are not as generally familiar with the Internet, as well as younger investors who live and work on the Internet but need some more hand-holding in terms of learning how to access financial information.  I give monthly investing seminars and am always interested to see how familiar average investors are with what’s available.  Generally, they are open to help and can use it.
  3. Evolution of the investment newsletter: As the ad-based model of media also suffers from a depressed advertising cycle, I predict investors will turn more to premium, subscription products.  Unfortunately, much of the financial newsletter industry is based on unsubstantiated hype.  Performance is important but so is fitting investments into an overall plan, managing risk, explanation, and creating an investment system that jives with investor lifestyle (people working 60 hr/wk should not be daytrading). Investors need to see:
    1. Audited performance metrics: New web firms like Covestor allow investment advisors to audit their risk-adjusted performance.  Investors need to better understand the power of these tools and how to use them in terms of do-it-yourself investing or hiring a professional.  Mark Hulbert has been monitoring the industry for years.  We need more.
    2. More types of newsletters: Most newsletters take a trading focus.  It makes sense because they are competing on performance.  Performance is just one (important) criteria, though and we need to see more newsletters that differ in style.  Buy and hold, dividend investing, retirement investing, macro, etc.  Investors need to be able to size themselves up, determine their needs and then accurately shop for the premium product that best fits their requirements.
    3. More responsible marketing:  Some many people are susceptible to predatory and misleading marketing of newsletters.  “Up 1000%”, “Profit Machine”, “Minting Money” — terms like this make investors think that newsletters are sure things.  They’re not and the volume of spam I receive with messages like these is increasing.  Newsletter will play an even more powerful role as more people decide to take a do-it-yourself approach in the wake of this market fallout.  Like Sean, I believe that we’ll see more hybrid “do-it-yourself-with-professional-guidance” models emerge.  Newsletters must take on more ethical responsibility.
  4. Changing Investor Relations role: Like most industries connected to the meltdown in the financial sector, Investor Relations is looking itself in the mirror and grappling with its future.  For sure, it’s not going away as someone needs to play the role of matchmaker between company and investor.  But that doesn’t mean the current model of press release + road show with mutual funds + conference is the only way forward.  The Internet has changed the way people invest and how they research investments.  IR is beginning to realize the power of social media and needs to step up to best represent their firms and position themselves for the changing needs of investors.  There is so much that can be done here — new models, new distribution, new clients.
  5. Better alerting systems: A moderate to heavy Internet user who monitors his/her portfolio with some regularity should notice big changes.  Probably not with enough forewarning to do something about a problem immediately but within enough time to make a decision.  Do I want to stay in this stock after the company has cut its dividend?  Made an unsolicited offer for a competitor?  Others need a better way to monitor their portfolios according to their requirements.  If a retirement investor wants to take an active role in managing the portfolio and doesn’t hear from a broker regularly or check the Internet, there’s going to be a problem.  Google Alerts can help investors stay abreast of breaking stories.  But it’s not good enough because it requires some understanding of how to structure the queries.  Many brokerage platforms allow SMS messaging for extreme price movements but investors don’t know how to use these things.

We are witnessing the changing of historical proportions as we cope with the evolution of the media industry.  Although much of investing has moved online, many are still attached to the old form newspaper.  I’m looking forward to seeing the changes happen that bring every investor into the fold.

Additional Resources

    Financial advisor finds profitable niche with social media


    It’s still early days for financial advisors adopting social media.  There are compliance issues, structural issues and just questions as to the ROI.  There are a few early adopters investment advisors, though, who have seen the light and are not only using social media, but building their practices via new media.

    EPIC Advisors and its Social Media strategy

    Sean Hannon, founder and CEO of EPIC Advisors, is ahead of the game.  After cutting his teeth at Goldman Sachs and JP Morgan, he set out two years ago to found his own Registered Investment Adisory (RIA), EPIC Advisors.  I had a chance to speak with him today.

    EPIC’s business

    Sean’s firm has over 90 clients ranging from high-net worth individuals to families beginning to grow their retirement nest eggs.

    • Transparency: Sean believes in a uniquely competitive level of transparency and runs his business accordingly.
    • Communication: Communication is extremely important for him and he works hard to ensure that clients are never surprised by his activities.
    • Personalization: The RIA structure and the Separately Managed Account (SMA) provides many investment advisors with a scalable solution to servicing numerous clients.  The adviser manages a model portfolio which is replicated out in client accounts on a prorated basis.  Hannon works hard to overlay client-specific activities on top of his portfolio so that each client has a customized portfolio inline with their individual  objectives and circumstances.
    • Value add: While such transparency may be a double-edged sword,  he ensures that he provides real value at every step of the investment process.

    3 Ways to Grow an RIA

    How he’s building his business is a how-to guide for financial professionals looking to build their business beyond the boundaries of their traditional extents of influence (community, city, state and even country).

    According to Hannon, he’s got a three pronged strategy to grow his assets: Continue reading

    As Broadridge and 2nd generation social investor networks roll out, openness a key issue

    Open social networks

    Don’t get me wrong: I believe in openness.  I believe that social networks should be set free to self-regulate.  I believe that in a perfect world, social libertarianism makes sense.  I believe that good, quality, trustworthy content would bubble up and all that nasty, nefarious, spammy stuff would be drowned out.stocktwits-tweet

    But life’s not perfect.  It’s messy and there are incredible incentives, especially in investing, to manipulate the system.  Like Richard Thaler in Nudge: Improving Decisions About Health, Wealth, and Happiness, I believe that choices should not be limited and choice architects can be employed at the policy level to help ensure individuals make better decisions with more optimal outcomes.  Yesterday’s announcement by StockTwits regarding small cap and microcap stock manipulation on the site is an example of how social networks are coping with the potential for abuse. With the potential for wild price swings, StockTwits is blocking suspicious activity  — not removing users but rather blocking what they write.  See my quick exchange with StockTwits’ Howard Linzon in the image to the right.

    Shareholder Services 2.0

    I had the opportunity to speak  recently with Chuck Callan, Senior Vice President of Regulatory Affairs at Broadridge (BR), a global powerhouse in solutions for securities processing, clearing and outsourcing and investor communication.  Broadridge is an interesting company — as a huge player in the outsourcing of financial reporting, they’ve taken some bold steps towards taking some core services and refreshing them with a social media twist.

    The company has three recent launches of innovative products/services in this space: an investor network, online shareholder forums, and virtual shareholder meetings.

    Investor Network

    From Yahoo Finance message boards to SeekingAlpha to StockTwits, there are numerous investor networks already entrenched.  What makes BR’s Investor Network different is that you have to be a verifiable shareholder to play.  Broadridge audits share ownership to ensure only shareholders of record are enabled to participate.  See a demo of how the system works here.  It’s the company’s belief that ownership brings more credibility to the conversation about stocks.  I don’t think that that is actually true, but more on that below.

    According to Callan, Investor Network is designed for use by broker/dealers to offer to their clients:

    Broker/Dealers are looking to provide social networking on a controlled, broker-branded site.  Investor Network allows brokers to provide a scalable, larger network in a controlled environment. Instead of just developing their own social investor network, each broker is now able to provide an entire network spanning multiple BDs and all of their collective clients – the value proposition for the BD is that they can provide social networking in controlled branded site, integrated with single sign-on and embed it with easy links to trading.

    BR had some beta testing this fall (2008) and went live just recently with their first client, FirstTrade.

    Online Shareholder Forum and Virtual Shareholder Meeting

    This is a set of technologies/services provided to issuers (companies with public stock) as part of Broadridge’s shareholder forum services.  Offered in conjunction with upcoming stockholder meetings, Broadridge’s offering provides audited shareholders with a control number/password through which investors access a online shareholder forum system. Investors can submit questions, take surveys (why own INTC, etc.), see tabulation of results.  Links are offered through the forum to Intel’s IR website, education resources, regulatory filings, and RSS feeds.

    It was released two months ago and Intel was first to use the new system.  BR already provides proxy services to over 1500 publicly-traded companies and believes truly that this will increase shareholder participation

    Future of Financial Communications

    I was interested in hearing from Chuck Callan what Broadridge sees as the eventual evolution of what’s occurring in financial reporting.

    He said this:

    Institutional investors have fiduciary responsibility, by and large, to vote.  Individuals are not required.  “Notice and Access” by the SEC rules resulted in an unintended drop in participation (drop of >75%).  In other words, when investors received actual voting materials, they used to vote 20-25%.  Now that they frequently receive just notice of an upcoming election, they only vote at a level of 3-5%.  Because voting is perishable, a lot of people intend to do it but don’t end up doing it.  Investor Network is a critical factor in addressing this drop-off.

    It provides investors a means to reengage and participate more with the companies whose stock they own.  It makes the online experience more attractive to investors and rebuilds participation in a way that preserves/increases efficiencies for Broker/Dealers.  And if the SEC decides that a shareholder has the right to participate over a secure network with anonymity, we can do that.

    Users get a better online experience by integrating this communication into a natural task environment.  Investors go to their brokers’ websites to check account information.  It’s right there at the login page.

    The New Rules Take

    I’m going to stick my neck out and break rank with some other experts in the field.  In my discussions with Dominick Jones, of IRWebReport, he’s been cool to the approach that Broadridge took with its social network.  Specifically, Jones explains, “BR’s network doesn’t grok the finer points of social media. e.g. accountability, identity, transparency. Social networks are made up of people with personalities. Not faceless accounts with holding indicators.”   Point well made and taken. Check out what Jones has written publicly about the Investor Network.

    I started this post with a rant regarding overarching policing of investor social networks.  As a professional investor, I’m sensitive to the onerous requirement exacted on the industry by the SEC and FINRA.  Broadridge understands this better than anyone.  Their clients are not the arm-chair investor in his pajamas writing on Yahoo Finance message boards about what a great investor he is.  While this person may ultimately be a user of the Investor Network, servicing the Broker/Dealer and providing value to issuers is what butters BR’s bread.

    An unfettered social network just doesn’t work in finance.  It can’t given the monetary incentives to game and manipulate the system.

    Does actually owning a stock give you more credibility in discussing a stock? Absolutely not, but it does say that you’ve put your money where your mouth is.  It means that I’m completely transparent in my motivation for discussing a stock.  There are other ways of accomplishing this (like Covestor or TradeKing which actually audit trades, as well).  It trebles down the noise of novices and pumpers just looking to make a point or be heard.

    • By limiting the network to stockholders, Broadridge at least assures its clients that it is attempting to provide a tighter, more focused, higher quality network — something important for a B/D that doesn’t want to see its offerings degenerate into Yahoo Finance trolling (Check out the comments on Yahoo’s expert pages –they’re gross).

    I think Broadridge needed to take this tack given where they sit in the financial reporting ecosystem and it’s a bold move for them.  I think they’ll see more take up on the shareholder forum and virtual voting as an extension of physical, in-person shareholder meetings.  Social networks do want to be free and I expect to see that the Investor Network will launch with other B/Ds but I don’t expect to see traffic and participation rivaling anything like Twitter or StockTwits.  But maybe that doesn’t matter at the end of the day.  Maybe these designer vertical social networks can survive and thrive with a smaller audience and higher-level participation (as long as they find a monetization engine and Broadridge can ultimately bundle this into other products and services).  And that, would actually be a boon for both Broadridge, its clients, and ultimately, investors.

    Broker’s Guide to Finding a New Job

    Times are tough

    Tough for everyone and tough for stock brokers who are reeling from both the nasty performance of the stock market over the past year and from structural changes in their business.  So far this year (May 2009), over 17,000 brokers have left the profession which would equate to 35,000 exiting the business by year’s end (2009).   That’s almost 6% of the entire field opting out.


    Taking stock and figuring out what to do

    Become a franchise player

    So, what’s a broker to do?  If you’re at the top of your field (generating over $1m+ in fees per year), there is heated competition for your skills and you should find numerous firms looking to pick you up on sweet terms.  In this case, become a franchise player.

    Planning your next move

    If you’re not there yet (ie. generating less than $250k in fees) and still employed, it’s probably worthwhile making a game plan about what to do next in your career.  Change is prudent and sometimes necessary, so have a plan.  You planned your clients’ moves involving lots of money.  Pretty high stakes.  Your career is too and requires the same type of oversight right now.

    I think a broker’s career management decision tree is pretty simple at a high level right down and it centers on two options: do I stay in the business in some capacity or do I find a new field of employment?

    Stay in business vs. Find a new field of employment

    Stay in business

    1. Switch brokerage firms: huge finders fees and great incentives.  If you are a big or even medium sized producer, you’ll find better payout rates at many firms.
    2. Become an Registered Investment Advisor (RIA): Join another firm, start your own.  The business is headed in this direction anyway — away from commission-based advice.  Many have left the wirehouse world and have started up their own advisory firms.  Start one yourself and bring your clients with you or join another firm and leverage their startup costs.
    3. Find another role in brokerage/advisory world: When I was an analyst at a hedge fund, we had someone whose sole job was to help the funds under management locate borrowable stock to short.  He wined and dined his prime brokerage relationships and enabled the fund to make a lot of money because we could get our hands on stock to short while others could not.  Similarly, lots of hedge funds need help with back office functions or client management (aka bringing in investment dollars).  If you have a strong book of business, help raise money for startup hedge or mutual funds.
    4. Find a different way to monetize your skills: Jim Cramer is no longer a money manager.  He’s a media personality and he butters his bread by being entertaining and teaching millions of people about investing.  He is a credible source of information (whether you like him or not) because he has such great institutional experience.  He is entertaining and has helped excite millions of investors.  Others have created financial newsletters to sell on the side.  Others have created trading systems for do-it-yourself investors.  Still others aren’t quite sure where all this is leading and have started blogging to begin building an online reputation.  Use SeekingAlpha to help showcase your skills.
    5. Become a recruiter: Sound strange?  Nah, Heidrick and Struggles, one of the leading executive recruiting firms really grew from its financial services practice.  Times are tough but recruiting requires very little sunk capital, a phone, computer and a rolodex.  Close a couple of searches and that can make your whole year.
    6. Become an expert: Slow times create opportunities.  Take this time to rebrand yourself as an expert in something.  Anything.  Maybe it’s wealth transfer.  Maybe it’s tech stocks.  Anything that can differentiate you from your peers will pay off.  Participate with your expertise up in an expert community, like Covestor. Show off using social media, like Twitter.

    Change fields

    1. Find a business development/sales position: Like making deals? Once outside the financial industry, you can use your ability to close and speak persuasively to help build companies, partnerships and sales.  Media companies are hiring (NOT newspapers).
    2. Start your own franchise: Find and research franchise opportunities.  Franchises allow you to run your own business but with corporate backing.  It’s a great way to begin a new career for someone who wants to be their own boss and run a restaurant, dry cleaning, office supply store, whatever.
    3. Join a non-profit: Non-profits are suffering.  Rainmakers are having a hard time luring fresh funds in a down market.  Your book of business and rolodex may make a great partner working with a nonprofit to make a difference.  You won’t know until you try.
    4. Dabble in real estate: You know rich people.  You know people who are looking for opportunities. There are always opportunities looking for rich people.  Be the matchmaker.
    5. Try something out of the box: Check out US News 30 Best Careers for 2009.  They’re quite different than what you’ve been doing up to now.  There’s no better time to redefine yourself than right now.  Ghostwriting is up there — if you like writing and are good at it, take a stab at helping to write a business book for a colleague.

    Distress creates opportunities.  Financial advisors and brokers are facing the double-whammy of a shrinking asset pool combined with an industry that is changing quickly in the face of increased regulation, more competition and further disintermediation by the Internet.  You can take this time to make yourself more competitive when the economy picks up or opt to do something completely new.  Brokers have access to investment money, understand financial products and know a thing or two about client service.  Put those to work in something that’s going to both spiritually and fiscally rewarding.

    How top brokers are like franchise players

    The News

    News hit this week that upstart financial advisory firm and independent broker-dealer, HighTower, landed star broker, Richard Saperstein as a partner.

    According to an article by InvestmentNews, Saperstein manages a book worth about $10 billion in assets.

    Nabbing Mr. Saperstein is a financial coup for HighTower.

    If he charges clients in his bond and cash portfolio a fee of 0.35% to 0.4%, standard for the industry, that means he alone could generate about $35 million to $40 million in revenue for HighTower, an astonishing sum for a firm to land in one fell swoop.

    Clearly, this was a huge coup for the young firm started by well-weathered Wall Street veterans Philip Purcell and David Pottruck.

    Franchise players as double-edged swords

    As in sports, franchise players have the ability to make or break a squad.  If I had to choose a few characteristics that go into landing and signing a player of Saperstein’s caliber, I’ll turn again to the sports analogy.

    • franchise players sign multi-year, lucrative contracts: We don’t know all the details of Saperstein’s package, but we have to assume it was really tasty.  HighTower was said to have set aside about 25% of equity to help lure players of Saperstein’s caliber.  I’d expect a big chunck of this equity to be allocated on this deal.
    • veto-power on trades: Many franchise football players have no-trade clauses worked into their contracts, allowing them to veto any horse trading concerning them.  As an equity partner and the driver of immediate revenues, Saperstein liked the product so much, he just became part-owner.
    • Top recruits are double-edged swords:  HighTower has made no bones about its strategy to attract and recruit top talent from around the industry.  From the website:

    HighTower offers elite advisors with high net-worth practices at traditional firms a unique chance to realize the full value of their achievements. We offer both an attractive initial compensation package and a long-term equity stake.

    At HighTower, you have the opportunity to be compensated for the value of your business multiple times. First, at the inception of your relationship, and then again over time through your ownership interest in HighTower.

    As in sports, top players attract other players looking to be part of a winning, or at least, exciting team.  The problem with franchise players is that they have essentially assured themselves of playing time.  This has a perverse effect of scaring off others who believe they are of the same caliber or may be competing for the same position.  Other top brokers may decide against joining HighTower because of such a high-profile hire.

    • media recognition as face of the franchise: Many professional athletes actually become the team they play for, at least in the public arena.  With wide recognition as one of the tops in his trade, Saperstein brings immediate credibility to the fledgling firm.

    Broad Implications

    The exodus out of traditional wirehouse brokerages to independent firms is continuing.  Barriers to entry are falling and independents are rising to the challenge to create firms with equivalent resources to service both high profile brokers and their clients.  Assuming that independent RIAs have institutional-grade platforms and services to compete against the Big Boys, why wouldn’t more elite brokers  choose more lucrative packages to monetize their books?

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