| Today, more and more traditional investment brokers | | | | for their portfolios. That is the reason why so many |
| are making the transition from charging one-time | | | | are doing well as independent brokers. And this |
| commissions to levying annual fees for managing their | | | | business is gradually coming into its own as more and |
| clients' assets. Consequently, small investors are being | | | | more brokerage professionals are being lured into it. |
| forced to shun them and instead turn to independent | | | | Many investors prefer independent brokers over the |
| brokers for their investment needs. To act as an | | | | traditional brokerages, since there is little chance of |
| independent broker, a professional has to register as | | | | partiality to any particular firm and, in turn, judgment |
| an investment advisor and sign up with a big | | | | clouded by personal motives. Independent firms pay |
| brokerage house, which in turn provides the | | | | fees for services provided by their parent firms. The |
| necessary operational support. The chosen brokerage | | | | parent firms do not begrudge operation of these |
| firm would act as custodian, trader and backroom | | | | independent players, on the ground that the latter's |
| office for the independent broker. Alternatively, | | | | fee contributions are accounting for an ever-growing |
| independent brokers can also manage these things on | | | | share in the former's revenues. |
| their own. But for a professional, striking out as an | | | | The independent brokers have also now begun |
| independent broker is not easy. The first, and | | | | cutting loose from their affiliations with big |
| perhaps the biggest, hurdle is getting clients to | | | | brokerages and managing things on their own. This is |
| transfer accounts. | | | | because they are averse to losing any revenue to |
| On the other hand, the rising costliness of the | | | | brokerage firms once their line of business acquires |
| established players has wedged open a low-end | | | | credibility. Further, they also want to enjoy the |
| market for newcomers. More and more small | | | | strategic advantage of not being associated with |
| investors are looking to these comparatively cheap | | | | brokerage firms which represent the interests of |
| alternate service providers to take over responsibility | | | | particular business groups. |