Purchasing of Broker Dealer or Investment Advisor
Purchasing a broker dealer or investment advisorcan become quite a complicated endeavor especially when regulatory approval becomes necessary. Independent registered investment advisors can generally be acquired over a short period of time with minimum downtime so long as you meet state and SEC requirements and are able to adequately update all the required internal documents and filings.

However, purchasing or merging broker dealers, depending on their size and scope of operations, could become a very long, complicated and stressful process. Assuming you’ve done your due diligence and have negotiated the terms of the transaction, you can’t just simple buy the broker dealer and assume control of its operations.

Before you can close on a broker dealer transaction, you must submit a complete 1017 application with documents to FINRA (Financial Industry Regulatory Authority) and wait 30 days from the notification date that FINRA notified you that a complete application has been submitted. This application is no easy task. There is a significant amount of work involved in the preparation of the 1017 package that must be submitted. If you miss one document or the package is deemed incomplete, you closing could be delayed 30 to 90 days.

Remember, just because you closed on a transaction as your entitled under the rules, it does mean that FINRA will ultimately approve the transaction. If you don’t satisfy their supervisory or compliance requirements, you wont pass. If you cant get al your operational and supervisory documents in order, you wont pass. If FINRA deems you don’t maintain the necessary background, expertise and licenses to satisfy the requirements of the firm’s businesses, you won’t pass.

If ultimately you don’t pass the scrutiny of FINRA, FINRA can halt your ability to conduct business, force you to file a BDW and shut the broker dealer down, sell the broker dealer back to the original owner or reorganize the firm under new management acceptable to FINRA.

It’s not recommended that you endeavor to meet the 1017 requirements on your own. Wall Street Consulting Services are Experts in managing the 1017 acquisition and sale process. We can guide and assist you through a smooth acquisition process. From the Agreement to the Pro Forma to drafting new Policies Procedures and ultimately the filing of the 1017 application, we are here for you to assist in achieving a successful transition.

Once you have found a broker dealer or investment advisor which interests you and you completed the required Confidentiality Agreement, you will be provided a due diligence package and the contact information of the BD so that you may contact them directly and commence your due diligence on the firm.

confidentiality agreement   1017 checklist