La Salle began 2006 working with just with four issuers. But by the end of that year the wholesale broker dealer was doing business with 16 independent issuers. La Salle works with some of the biggest names in the US market, from Societe Generale Corporate and Investment Banking to Barclays, HSBC, Rabobank and its parent company ABN Amro. The wholesaler also works with Morgan Stanley, Bear Sterns, Wells Fargo and trades secondaries with a number of institutions including Bank of America, BNP Paribas and Wachovia. "Last year was all about making LaSalle a powerhouse - a one-stop source for structured products," says John Tessar, LaSalle Broker Dealer Services' product manager for structured products in Boca Raton. And the firm's achievements in the past year are plain to see.
"The success of our business model is predicated on a simple idea called 'Kiss', which stands for 'keep it structured simple'," Tessar explains. "Under this premise, we have simplified the three most important areas of structured products distribution, namely education, information and trading."
That's not to say La Salle has dismissed the idea of product creativity. Far from it. "We've certainly had our share of firsts," Tessar says. "We were the first firm to distribute index-linked certificates of deposit on an ongoing basis to the entire US broker dealer community, and we have been doing it non-stop, every month, for almost 10 years. In the early part of this decade, we were also the first to distribute reverse convertible notes to the masses, with increasing success. And recently, we were the first to distribute callable reverse convertible notes with Rabobank - you can now find half a dozen other firms looking to do the same thing."
La Salle is also arguably responsible for making the principal-protected 'World Basket' a well-known term on Wall Street. Encouragingly, though, La Salle also believes that product innovation can only prosper if adviser education is maintained at a high level.
"Many other distributors have spent time focusing on the next product. While we believe wholeheartedly in this concept, we still feel that this is not where the greatest opportunity for growth lies, " Tessar says. "Our greatest opportunity for future growth lies in educating the thousands of reps and advisers that have never heard of a structured product."
And educate them La Salle has. LaSalleBondInstitute.com, the firm's online education platform, is dedicated to educating reps on all fixed-income products, including reverse convertibles and principal-protected notes.
La Salle has also made huge inroads with its secondary market platform. "In 2006, we built the most active secondary structured products market in the US," Tessar says. "We have almost 150 broker dealer clients involved in secondary trading, and last year we saw a year-on-year increase of 600% in secondary trades. In any give month, we will transact over $30 million notional in secondaries with any one of our 16 different issuers."
La Salle processed more than 7,400 individual trades with more than 350 broker dealers during 2006 for a notional size of over $832 million - marking a 88% increase over the previous year's results.
Finally, La Salle is a name that crops up again and again when it comes to client satisfaction. "As competition increases and weaker hands have fallen by the wayside, LaSalle has proven that it has the staying power and can be counted on to continue bringing fresh ideas and innovative products," says Brian Kolomyski, Detroit-based senior corporate trader of structured products at H&R Block Financial Advisors.
Ultimately, Tessar argues, such endorsements can be attributed to La Salle's educational initiatives. And its clients agree. "LaSalle's commitment to education is exemplary," says Jennifer Wisneski, New York-based senior manager at broker E*Trade Securities.
WHY LA SALLE WON
The firm's commitment to education is second to none. Not only has La Salle brought many firsts to market, it has also built a hugely successful business that puts client education first.
The week on Risk.net, September 8-14, 2018Receive this by email