Over the past few years, more and more firms are diversifying
services and products. In an effort to support this business
development and attract new talent, broker-dealers (“BDs”) are
permitting associated persons to affiliate with independent,
non-affiliated investment advisory firms (“IAs”) and vice-versa,
which allows the representative to conduct both brokerage business
(as a registered representative or “RR”) through the BD and
advisory services (as an investment adviser representative or
“IAR”) through the IA. This also allows for greater prospective
client development opportunities, which leads to revenue
generation. However, with more diversity come greater
compliance challenges that necessitate engagement of legal counsel
during particular transactions. This legal tip will provide
important information regarding challenges compliance officers have
in overseeing the “hybrid” business model, with a case study
involving special considerations for supervision of outside
business activities and revenue flow.
Click hereto read the Legal Tip.
