Month: December 2018

A financial advisor hedges a great deal of their success on the broker-dealer they choose to affiliate with. The broker-dealer controls the price points for revenues by setting advisor payout percentages, and it controls the price points for expenses by setting trading costs and fixed technology expenses, among other things. As an advisor, are you aware of the true costs of the services and products for which your broker-dealer charges?

Do you know the firm’s profitability per trade or the margin they make on the E&O policy you purchase from them? Are you aware of ancillary lines of revenue to the broker-dealer like interest on cash sweeps? Most importantly, when you are looking to evaluate a new relationship with a broker-dealer, do you ask any of these questions?

Broker-dealers and advisors alike are in business to make money. However, advisors need to align with a firm that offers transparency regarding their methods of generating revenue; that’s a BD that can be trusted with your business. Today I wanted to talk about IFP and why we’ve always strived to promote transparency as a hybrid RIA and OSJ, and why we’ll continue to do so as a broker-dealer.

Motivation Beyond Profits

As simple as the concept is, IFP needs to generate revenue to keep the lights on and provide a suite of services to our advisors. With that said, that’s not our motivation for creating our RIA or the reason we’re creating a broker-dealer. We aim to create a culture of transparency (there’s that word again) where we foster an environment where our firm and our advisors achieve mutually beneficial victories. The new levels of scale we’ll bring to the table will help improve client outcomes.

Decision Buy-In

Quite often in our industry, regulatory changes or actions occur that force broker-dealers to implement new, costly initiatives. Sometimes these BDs pass on some of their increased cost to the advisors through arbitrary fees, ambiguous service rate hikes, and other vague changes to their payment structure. We will not. If we’re forced to abide by new regulatory standards, thereby increasing our cost to do business, we will explain the situation in full detail and lay out the changes to our fees. We feel that advisors are more likely to trust us and buy into our firm if we’re continuously transparent about the reason behind our financial decisions, even if the decisions don’t benefit them.


I suppose the most important benefit of transparency and disclosure is trust. Do you trust that the actions of your current broker-dealer are done with everyone’s best interest in mind, or are they self-serving? Without transparency, it’s sometimes hard to make that determination. Advisors that affiliate with us will know where we stand financially and strategically, what our costs are, why we charge what we charge, and the reasons for our decisions, thereby increasing the trust levels between our businesses. And that trust means a stronger and more cohesive relationship.

My Last Thoughts

If you’re with another broker-dealer, I suggest you ask pointed financial questions as to their margins, markups, etc. I also suggest you ask strategic questions as to what the relationship will look like in the next 3 to 5 years. Ask them to be specific and not talk in generalities. You may not get the answers you want, however, if you feel they’re being truthful, you know you’re dealing with honorable people. I sincerely hope that you’ll be pleasantly surprised. We hope IFP’s transparency can serve as an example and motivation for other firms to follow because I believe the best advisor is an informed advisor. A better understanding of the environment in which they work can help lead to better outcomes for everyone.

By now, we’ve all heard the tales. Maybe your neighbor’s identity was stolen, a credit card was compromised, or an account was hacked, spilling personal information into the unseen corners of the dark web. Did you know you can check if your information has been compromised in a breach via the Have You Been Pwned website? If you’re like many Americans, your information will likely show up as compromised in one way or another.

In the financial advising world, we’re no longer talking about a simple compromised shoe store account password or a hijacked email account; we’re talking about the livelihood of investors and possibly the future of your career in finance. Now that I’ve got your attention, I wanted to talk about a few ways that IFP is working to strengthen our cybersecurity and nurture an ecosystem that promotes a secure digital workplace.


Cyber attackers relentlessly attempt to access client accounts. It makes sense; there’s a large amount of money in these accounts and some people hardly check their retirement nest eggs, let alone on a daily basis. To combat this, we’ve integrated multi-factor authentication (MFA) into as many systems as possible at IFP. MFA is one of the most effective ways to secure access to prevent brute force attack. Advisor[X], our upcoming proprietary technology platform, will feature one of the most sophisticated methods of MFA, placing the most sensitive login credentials behind the protection of our single sign-on (SSO) interface.

As an added layer of protection, all credentials captured for authentication via Advisor[X] are heavily encrypted. Our system will also verify whether passwords in real time to determine if they were stolen in previous breaches and, if so, recommending a password change to the user. Lastly, in the case that an attempt is made to penetrate our authentication layer, our team is immediately alerted and made aware, allowing us to respond immediately.


Alright, now that we’ve covered authentication and how it’s integrated into our technology stack, it’s time to talk about the foundation of Advisor[X] — our data infrastructure. It’s one thing to build a secure platform, but without solid ground work, it means nothing. After an absurd amount of research, we chose Amazon Web Services as our primary data storage center. Additionally, we’ve partnered with a global consulting firm that specializes in data infrastructure and security for financial services to metaphorically nail everything to the floorboards.

We chose this path to provide sustainability to support our initiatives, including the expansion of our platform and IFP’s advisor network. It’s also about taking data, making it actionable, and improving the experience for our advisors using the platform.


In addition to our data governance policies, IFP is has chosen to be intentional about the partners that we work with. It is important that our partners share our passion for security and protecting our advisors and their clients. Our due diligence process is built around ensuring that any company that we work with has the appropriate controls in place to manage, track, and protect any data point that is provided by IFP or generated by the third-party company.

While cybersecurity is a hot topic across all industries, we believe that the financial services sector is extremely susceptible to these attacks. IFP believes in protecting clients from danger and our advisors from losing their credibility (or possibly their credentials and livelihood). That’s exactly why we’re building Advisor[X]. It’s more than just an application launchpad; it’s a chance to build a platform our advisors can trust without excess doubt or worry.

Third party service providers mentioned are separate entities from IFP.