If you are an independent investment banker, independent placement agent or an institutional financier, it’s time to look for broker-dealer sponsorship services. With the Financial Industry Regulatory Authority (FINRA) Series 79 investment banker licensing exam and compliance category requirement, along with “Pay to Play Rules,” licensing and compliance now beg for convergence between independent investment bankers, independent placement agents and institutional financiers with licensed independent broker-dealers.
Will such a convergence drive growth, security and support for your business? It’s time to search for the answers that will change your game. Let’s examine broker-dealer sponsorship services and the ways in which convergence between your firm and a securities firm can positively impact your business and raise your game:
- Customized broker-dealer sponsorships may be arranged after factoring in types of transactions, frequencies of transactions, compliance items and issues, current overhead, securities activities and licensing requirements of your firm. Not all securities firms offer broker-dealer sponsorships; you’ll want to investigate the services of each to determine if the firm is a fit with yours.
- Personal oversight by an individual or team creates a solid base from which to build and grow your business further. A team of qualified professionals will assume the commitment to your customized sponsorship and often includes compliance, regulatory, and other broker-dealer needs. This type of professional collaboration can be priceless, as you are receiving assistance from bankers and others who have years of experience in diversified fields.
- Mergers and Acquisitions (M&A) Transactional Advice is often offered and is invaluable, as advice and convergence from within the sponsoring firm are positioned expertly when sell-side and buy-side transactional and execution services are needed for clients planning to sell or acquire businesses.
- Capital-Raising is another service often offered in a broker-dealer services package. It includes advising and assisting companies to raise equity and debt capital from financing sources of all types and sizes.
- Independent Sponsors may also practice and provide capital advice and access through all aspects of the buyout process. This service is not always included, but can be of profound value when needed in a broker-dealer services relationship.
- Secondary Financings are focused on secondary markets in negotiations, purchases and sales of private securities and on buyers and sellers, including venture capital and private equity firms, family offices and individual shareholders. Again, while not always included in broker-dealer services, secondary financings can be a solid asset when needed and offer added value to the sponsorship relationship.
In addition to the services offered, an interactive broker dealer platform should be part of the broker-dealer services agreement. The platform is utilized to conduct several of the above transactions and adds a wealth of additional capabilities in several areas. In any broker-dealer services agreement, you’ll want to ensure a deep platform of digital capabilities is included. For example, a recent national travel agency company was acquired by a hotel management corporation. The travel agency business plan included complex legal contingencies for an acquisition process and a broker-dealer services sponsoring firm utilized the in-house broker dealer platform to execute the process to completion.
The following tools and capabilities are essential within a high-quality broker dealer platform:
- Interactive workspace: The primary purpose of the workspace should be to drive growth and support every integrated component of your business. It should facilitate lead generation and include specific support elements that your business requires.
- M&A Performance History: An excellent independent broker-dealer platform will have a rich history of transactions with at least 2B in aggregate deal value. Successful historical performance that was built via the platform suggests superior value for your business needs.
- High-speeds, efficient turnarounds and superior execution: Each of these characteristics will be built into a superior platform. Consider the value for your firm with each of these support tools, especially in terms of time-saving innovations they offer.
- User-friendly workspace free of complexity: A platform that performs freely and without cumbersome complexities is one that will support your efforts with results that can add significantly to your performance. Consider a user-friendly workspace to be of paramount importance.
- Significant library of resources: An optimal selection of resource and research materials should be included in any platform that is included in an independent broker-dealer services agreement. Lead generation tools should include such offerings as: IBISWorld, D & B Hoovers, Pitchbook, and more.
In your search for independent broker-dealer sponsorship services, you’ll want to consider all of the crucial elements of the services and collaborative systems provided. You’ll also want to evaluate the platform used within those services that will drive growth in lead generation, research capabilities and M&A performance. It’s time to change your game!
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