Running an optimal and efficient dealer operation is a challenging effort for management and staff. There are many cost components, many of which are introduced by external stakeholders, such as product manufacturers, regulators, systems and service providers. Other costs components are direct result of management initiatives, such as policies and procedures, compliance and legal resources, administration and office overhead.
In many cases, especially in the smaller dealerships, there is always lack of time, sometimes lack of knowledge and often lack of scale to efficiently optimize these costs. Take advantage of the skills, experience and scale of B2B Bank Dealer Services and join the more than 150 dealers in Canada using our carrying dealer services.
Based on a number of industry studies the main cost components of running a dealership are:
- Staffing costs (clerical, support, training, audit, compliance, finance)
- External costs (legal and compliance)
- Systems and support costs (licensing and support of back-office systems)
- Administration and Office Expenses (mail, office space, etc.)
The most effective strategies for managing these costs are based on prudent management and avoiding unnecessary risk. Using a carrying dealer, such as B2B Bank Dealer Services and nominee accounts is a key part of this type of strategy. A carrying dealer is usually a member of SRO (IIROC, MFDA) and hence you can offload many of the costly items from a dealers operations, including:
- Reduce compliance and some compliance costs – Carrying dealers are subject to many of the same regulations (MFDA/IIROC/AMF) as introducing dealers. Hence, the cost of compliance, audits, and policies and procedures can be reduced when working with nominee accounts and a carrying dealer.
- Many of the back-office components can be out-tasked – Leveraging the carrying dealer can reduce many expensive tasks and services. Processes such as trade processing, advisor support, management reporting, payments and deposits can be done by the carrying dealer.
- Administration costs are covered by fees collected by the carrying dealer. All the costs of producing and mailing statements, systems and technology, online client and advisor access available from the carrying dealer are part of the service offering thereby reducing or eliminating these expenses from your operations.