The securities industry has always been invigorated by the entry of new firms, says Ian Russell, president and CEO of IIAC in a recent letter.
He says increased competition forces other firms to come “up with new ways of serving clients and [also] work harder to compete…In recent years, five increasingly competitive carrier broker platforms have been providing needed back office and outsourcing services, as well as sophisticated investment products.”
He adds, “The bad news? Limited-scale and specialized focus have made Canada’s roughly 180 small and mid-sized dealers especially vulnerable to inevitable market downturns.”
While cutting spending has helped companies skate by in the past, he says long-term market malaise has caused both investors and entrepreneurs to pull back. As a result, Russell says IPO financing have come to a halt in recent years.
Not to mention, “Secondary offerings of small business shares in public markets is now a fraction of the financing volume before the financial crash four years ago.”
On a positive note, Russell says the client relationship model has been revamped since 2008 with the introduction of four key practices and requirements. These include the disclosure of conflicts of interest, as well as enhanced suitability requirements.
Read the full letter for more on how CRM requirements have changed, and on how financial industry entrepreneurship has waned.