Dan Faucetta and Dan Weiskopf, former
Their mission: to provide ETF investment advice to retail and institutional investors and help independent traders using the Forefront platform move into the ETF business.
Forefront was started last April when Luis A. Marino, its founding partner and president and a former financial adviser at
Instead of trading out of a spare bedroom, these people can avail themselves of Forefront's willingness to supply them space and a community in its midtown Manhattan offices. These breakaway brokers — starting their own registered investment advisory firms instead of working for a big bank or broker/dealer — have become a hot commodity on Wall Street. Registered investment advisors need a place to trade, and firms are competing for their business.
Forefront has a name for these traders: "instividuals," that is, individuals who act and feel like institutional customers. "We are sitting on a historic amount of talent and knowledge that could use a home," Marino said.
Instividuals' goal may be to start their own investment firms, and Forefront supplies management oversight, since it is a
"What we provide traders is not only all of the infrastructure, compliance and regulatory support to relaunch themselves independently but [also] the ability to grow their strategy," Marino said.
Forefront is not alone.
The trend toward recruiting brokers has been building for a few years, but only recently has the "perfect storm arrived," said Chip Roame of
Now that brokers can get access to the same products and technology through smaller firms, they no longer need the support of a big company, Roame said. And the so-called golden handcuffs — stock options wirehouses gave advisers — are worth significantly less as the financial industry continues to struggle.
Another factor: Older brokers dream of being independent and able to sell their book of clients. "This is much easier to do in many of the more independent places," Roame said. "So the winners may be the latest crop of these breakaway broker homes."
As Marino put it: "Everyone desires to be an entrepreneur."