Broker/Dealer Acquisition or New Application?

Why Buy an Existing Broker Dealer?

The only real advantage there is to purchasing a broker/dealer rather than starting one from scratch is time. In purchasing an existing broker dealer, if the deal is structured properly, you can be up and running in a very short time. It is important to note that there is various purchase structures custom tailored to different situations. Our service includes an initial assessment, presentation of various alternatives, and other options to consider.

If you are willing to pay a premium price to acquire an existing broker/dealer, you will be able to immediately to conduct the business outlined in their membership agreement. You will also be restricted to the number of Representatives and branches based on the firm’s current safe harbor allowances. FINRA will require notification of the proposed transaction no less than thirty (30) days prior to effecting such transaction. Representatives that are currently registered with other member firms will experience a much easier transition if they purchase a broker/dealer as opposed to starting one. There are no action letters that are valuable tools for a representative to determine how to begin the process without notifying your current broker/dealer.

Upon Notification of the proposed transaction, The Buyer will the begin the "CMA" (Continuing Membership Application) process immediately, pursuant to NASD membership NASD 1017. Please click here for more information about this 1017 process.

Disclosure: It is important to conduct thorough due-diligence prior to buying a broker/dealer. It is our experience that a successor firm could be named liable for businesses conducted by the predecessor firm. Broker/dealer acquisitions are ideal when the predecessor firm has no operating history. You are advised to talk to an attorney regarding successor liability, which will involve corporate law and not FINRA or SEC. Additionally, when acquiring a broker/dealer, you must ensure that all compliance documents are delivered to the successor firm. Historically records will be subject to future FINRA and/or SEC Audits.

Please note that the above description is informational only; for additional details, please contact one of our team members.