NIBA Journal

Insights, analysis, and updates from the National Introducing Brokers Association

September 22, 2011

Chairman's Message | September 2011

Dear NIBA Members - Over 190 members attended the NIBA membership meeting last week in Chicago. Thanks to all our sponsors and speakers for making this another successful NIBA event. To continue the conversation with any of the speakers, just go to our conference page and click on an email address. I am always impressed with the people at our meetings. Of course the speakers are great. They are prepared, topical and deliver terrific ideas to help you increase business the minute you leave the meeting. But it is the members themselves that really impress me. In 20 years at the NIBA, I have met a diverse group of men and women who have changed and adapted as the industry and their clients’ needs changed. I admire our members who have had to learn to embrace technology, who must continually update their industry knowledge and who eagerly learn new marketing...

The Risk of Futures

In my book Jackass Investing: Don't do it. Profit from it., I take on the myth that "Futures Trading is Risky." I do this by first pointing out that it’s not futures that are risky, but the often reckless behavior of individual futures traders. If the proper risk controls are not in place and if leverage is abused, substantial losses will occur. But this reckless behavior is not unique to futures trading, stock investors often routinely and recklessly expose themselves to unnecessary risk (my definition of "Jackass Investing") by hanging on to losing positions. In fact, it's the cornerstone of the "buy-and-hold" mantra. You need only look back over the past decade to see numerous instances where supposedly diversified stock portfolios incurred losses that exceeded 30%. The reality is, with the diversification opportunities that are available in the futures markets, a portfolio of futures, managed properly, should be less risky...

Understanding Public Perceptions on the Market with Technical Analysis | Part 1

A number of Nobel Prize winning theories start with the assumption that investors are rational. In the real world, many investment professionals discover through their daily interactions with investors that there are occasional bouts of irrationality. In discussing the markets with the public, it’s important to understand this since questions and firmly held beliefs could be rooted in that irrational behavior. Rational investors most likely only exist in Modern Portfolio Theory. The argument makes sense intuitively. Investors will buy the portfolio that maximizes the potential returns while minimizing their personal preference for risk. But in the rule world, emotions like far and greed, infiltrate the decision making process. Potential returns are generally defined by discounting the future cash flows of an investment back to its present value. In theory, some investments will be undervalued and these should be bought. Others will be overvalued and would be avoided, or sold short...

Stand Apart From Your Competitors | Build Power With a Strong Brand

by Lida Citroën Principal | LIDA360, LLC Become intentional as you build your personal brand Branding gives experience to something intangible; it gives names to the qualities I feel when I work or interact with you. Unlike marketing, which is when we direct an audience to action, branding sets the emotional expectations and promises between you and your target audience. Here are some ways you can become more intentional and focused as you build your brand: You can start by becoming intentional about the words you chose, the company you keep and the way you represent yourself. Your audience is looking for consistency and relevancy. Consider how you want to be perceived, the reputation you want in the world, then intentionally create a path in that direction. Think about how you are behaving – are you acting like someone you want to be? Are you behaving in an arrogant, pushy...

Inbound Marketing for IBs and CTAs

At the NIBA conference next month, Phil and I will be talking about how IBs and CTAs can leverage inbound marketing to improve the effectiveness of your marketing programs and attract more leads. To prepare, I thought it might be helpful to introduce some of the concepts we’ll be discussing. Inbound Marketing versus Interruption Marketing Traditionally, marketers have used various forms of what is now called “interruption marketing” to gain attention from their target prospects. Whether the technique is radio advertising, , email marketing or cold calling; the marketing message essentially interrupts the prospect’s train of thought. This approach is becoming less and less effective over time for two reasons: Noise: It is estimated that your prospects encounter 2,000 marketing interruptions per day. It’s very hard (and expensive) to ensure that your message is heard above the cacophony. Filtering: Your prospects are finding new and creative ways to block your...

Chairman's Message | August 2011

Dear NIBA Member: On August 8, 2011, the Association filed a comment letter relating to the Proposed Amendment to CFTC Regulation 1.35(a). This proposed amendment goes beyond the NFA Rule which requires firms with a certain number of disciplined APs to record conversations with clients. The CFTC proposal would require every IB to record all oral and written communications with a client or potential client which lead to a transaction. After receiving member comments, the NIBA Board of Directors filed our Association comment letter vigorously opposing the proposed amendment. You can view the comment at http://comments.cftc.gov. Look for the comments due 8/08/2011. In January 2011, the Association also filed a comment letter opposing Proposed CFTC Regulation 1.71: FCM-IB Conflicts of Interest which would require IBs to separate people researching or analyzing price or markets from anyone involved in the firm’s trading or clearing functions who might prejudice or bias the...

Grow Your Business by Hiring the Right People

The financial job market has changed since Parkway Consulting was founded over 25 years ago. Today’s IB and CTA owners look for technology “know-how” as well as good sales and service skills, and market knowledge. While finding qualified candidates is always one of the top concerns of financial business owners, the solution can be as simple as looking to referrals from your present and past employees, or your business network. Conferences, like NIBA meetings, and trade shows such as the FIA Expo, are also great places to meet experienced professionals. Once you have several resumes to select from, you will want to check for any compliance or discipline history, research the firms the candidate has worked with in the past and begin to rank the job-seekers. Preparing for the interview and following through with that plan during the interview will assure you have asked the questions about the topics and...

Stand Apart From Your Competitors | Build Power With a Strong Brand

by Lida Citroën Principal | LIDA360, LLC Building your personal brand Successful executives across the globe are also embracing the power of "personal branding" to intentionally build a reputation for themselves and their companies that maintains this competitive advantage - in person and in the online world. Reputation counts when growing personal brands (and professional reputations). How your clients - and prospects - staff, peers and stakeholders perceive you has a direct impact on the loyalty, engagement and revenues you will generate. We hire professionals who have the necessary qualifications, and who make us feel a certain way. We know them to be capable. What causes us to "buy" - to hire them - is how we expect we will feel working with them. It has been said, "We act on logic... and we buy on emotion." Professionals with strong personal brands show up consistently and authentically. They have achieved...

Save the Date | NIBA Conference April 18, 2012 - New York

April 18, 2012 Location: NYMEX Building, NYC 1 N End Ave. New York, NY 10282 » Directions Save the date for the NIBA 2012 New York Conference, April 18, 2012. More information coming soon! We look forward to seeing you there!

Chairman's Message | July 2011

Dear NIBA Members - Did you know that the NIBA Online Directory is the go-to site for customers looking for a broker? Traffic to the NIBA website comes from search engine such as Google and from social media sites including LinkedIn. The site is well optimized and has a high quality score which translates into good visibility for your firm. Participation in the NIBA Directory gives every member a presence on the Internet without the cost of developing and administrating an individual site. If your firm already has exposure on the Internet, a listing on the NIBA site links potential clients looking for a firm active in a recognized trade association directly to you. Whether your firm handles futures, options or forex, your NIBA Membership dues include a basic listing in the NIBA Online Directory at no additional charge. Did you know that you can attend NIBA Membership Meetings free?...

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