Indie growth skids to a halt

The recent fantastic growth among independent broker-dealers came skidding to a halt last year, but the results were far from disastrous for many firms. According to a survey of leading independent firms, the top 25 broker-dealers saw gross revenue collectively shrink last year, the first time in recent memory such a widespread downturn has come to pass, industry executives said. Combating a stock market that went into free fall in September, which also compelled many clients to cash out of equities and invest in less lucrative cash products such as certificates of deposit and money market funds, the top 25 independent broker-dealers saw gross revenue drop 2.1% in 2008, in comparison with the year earlier. The top 25 individual firms reported $11.7 billion in gross revenue, according to the InvestmentNews survey of firms. Among the top 25 individual broker-dealers, excluding broad networks that often change and shift from year to year, only seven broker-dealers saw gross revenue increase last year, compared with 2007. Meanwhile, 15 of the leading firms saw gross revenue decrease, while three broker-dealers reported their revenue was basically identical or flat in 2008 when compared with a year earlier. That falloff comes after four years of solid growth, when the top 25 broker-dealers and networks averaged an annual gross revenue growth rate of almost 21%, according to InvestmentNews data. To find out more about independent-broker-dealer trends, read the special report in Monday’s issue of InvestmentNews.