Registered Representatives (RRs) of broker-dealers and Investment Advisor Representatives (IARs) often times wish to memorialize their commission agreements or fee sharing arrangements, respectively, with the BDs and RIAs at which they are employed/registered. Not surprisingly BD and RIA firms are more likely to want these “agreements” on paper, and while not always required FINRA and state regulators occasionally ask for them during examinations and investigations. 

I draft these agreements for my client BDs and RIAs and can advise you (whether RR/IAR or the employing firm) prior to and during your negotiations with the “other side.”

Broker-Dealer to Broker-Dealer Referral Agreements have been around for many years, but not too often in writing, which as an attorney I find disconcerting. In my own (and recent) experience more and more broker-dealers, as they narrow the focus of their business models (less products offered) are finding profitability with little to no risk (for the referring side) in referring clients, customers, and/or transactions related to business they no longer conduct, to other broker-dealers who do.

I draft these agreements for my clients and would be happy to speak with you about some of the scenarios where I find these agreements most popular.

The purchase and sale of broker-dealers (and to a lesser extent the sale by an investment advisor representative (IAR) or RIA, of his, her or its book of business) is an extremely popular occurrence in my world.

Many of my ongoing compliance retainer clients were originally came to me in need of my advice respecting the purchase or sale of a broker-dealer and the drafting of the purchase agreement.

The legal process of purchasing or selling a broker-dealer usually begins with a letter of intent being drafted between the purchaser and seller in order to put the most important terms of one party out there for consideration by the other.

A letter of intent works as an insurance policy so that misunderstandings can be addressed before the more time and resource consuming drafting of the purchase agreement begins. It’s amazing how terms “change” when conversations are reduced to writing! Please contact me if you wish to discuss how I can help facilitate the purchase or sale of your broker-dealer or investment advisor.

Many of my broker-dealer clients conduct business exclusively as placement agents and finders of capital for issuers seeking operating or investment funds. Some of these firms also conduct Investment Banking activity. I regularly draft agreements between my clients and their clients: that is, the issuers of securities (or general partner of an equity fund) for example.