At broker-dealer firms owned by insurers, the cracks are showing; Cultural changes are needed to stem losses, UBS report says, and ample scale is key.(News)

Investment News, August, 2004

Byline: Bruce Kelly NEW YORK - The deep cracks in many of the insurance-company-owned independent-broker-dealer networks are showing, according to a recent report by UBS Investment Research, a unit of UBS Financial Services Inc. in New York. According to the report, "Who Will Rise to the Asset-Gathering Challenge?'' many insurance-owned broker-dealers are losing money, and deep cultural changes need to be made to stop the bleeding.

Operating broker-dealer networks as "cost centers'' was tolerable in the past because of brokers' and advisers' drive to sell insurers' proprietary products, according to the May report, as well as industry observers and analysts. That has changed, and some insurance companies have decided in the past year to cut...

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