Subject: Fwd: Buy Side interaction with Brokers 101
From: "Eric Schwerin" <[email-masked]>
To: "Hunter Biden" <[email-masked]>
Date: Fri, 2 Oct 2015 17:17:13 -0400

Eric D. Schwerin
Rosemont Seneca Advisors, LLC
1010 Wisconsin Ave., NW
Suite 705
Washington, DC 20007
(202) 333-1880
[email-masked] <x-msg://59/[email-masked]>
P Consider the environment before printing this email.

> Begin forwarded message:
> 
> From: "Earlywine, Michael" <[email-masked]>
> Subject: Buy Side interaction with Brokers 101
> Date: October 1, 2015 at 6:34:08 PM EDT
> To: "[email-masked]" <[email-masked]>
> Cc: Eric Schwerin <[email-masked]>
> 
> Donnie,
>  
> Sorry for the delay but I think this is  going to help.  I suspect the progression is first to get a meeting with Joe for me to sell Burnham and our content.  If needed we bring in the Blueshift team to sell their unique research.
>  
> A service we use called big dough says the Achievement (it looks like the old Peak 6 group, so I hope it’s the same firm)  paid over 6mil dollars in commission over the last 12 months.  Granted this is down 30% from the previous 12 months but that is still a lot of commission dollars to work with.
>  
> I will send out the full big dough report for you to have a look at.
>  
> Call me after you have had time to look this over and let’s talk about a strategy to get that first appointment.
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> Happy hunting!
>  
> MJE
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> Research for Commission dollars
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> Notes/Changes
> This is the primary way Wall Street gets paid for research they provide the buys side.
> ·         Brokers provide research and money manager trade through their desk to pay for it.
> ·         As a broker we love this model because if we do a good job and cover the account well, we can often extract more commission dollars than the account intended to pay for.
> ·         Range - $25k to $500k to millions depending on the total commission paid to the street and the type of product.
> ·         Pushback – 
> o   I have too many brokers already
> o   We want to see the research first for a while
> o   I don’t have the budget
> o   I have too much going on and I can’t focus on something new
> ·         Reply
> o   There is always room for  a broker who actually adds value
> o   How can you afford not to know what Burnham is putting out, as this thing gets traction – and it will – you need to be there from the start to help shape it in a way the benefits you the most!
> o   “Early in the process we are not worried about budget, we can grow with you, open accounts and do a couple of trades and lets figure it out together”
> o   And while managers are hesitant to tell their traders where they have to trade it is very common for them to tell a trader…get this broker involved I want to start getting their stuff – when I was on the buy side just a year ago we often started a guy at $25k just to pick a number but $50k to $100k is when the fun starts.
> ·         NOTE:  Most desks have a certain % of their trades that are NOT tied to specific research ideas. This “agency” flow is usually sent to brokers in an effort to get best execution and can be “directed” to a broker for example, in return for our morning note.  We have experienced traders and all the right systems to get the job done.
> 
> This is very generic and is meant as background on how the traditional sales process works.  When you have personal relationships, the “ask” usually becomes how do I justify turning your broker on, how do I show some value.
>  
> Burnham’s Products.
>  
> ·         Our morning note is a little different than the usual product out there, short and sweat, with a sarcastic tone that traders seem to like!
> ·         Monthly Trend Tracker - a joint venture with Blueshift research.  Great look at the consumer, plenty of insight and touches about 25 different companies every month!
> o   We have the ability to add customer questions to this monthly report – very cool option and something I doubt you will see with any other broker!
> ·         Washington Note:  bi-monthly look at Washington and how the D.C. world affects our economy
> o   This kind of service sells for $50k - $125k a year from other providers. Admittedly our effort is not as detailed as the other products but I think there is an opportunity to add calls or meetings to the service and still demand a premium price.
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> Burnham Partnership with Blueshift!!!
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> Blueshift Research will provide its clients with a unique value proposition through its pattern-mining research. We will focus our energies on asking the right questions, gathering information from a variety of independent sources, and finding anomaly pieces of data that are representative of signals rather than noise.
> ·         150 reports a year, all ideas come from their clients  (means that you are getting research that other money manager find important! Can’t emphasize this enough, it’s like a free look into other managers ideas)
> ·          
> Blueshift has tried to get into Achievement for Years!! No luck so far
> ·         There is every chance that without a sponsor they (Achievement) have never given the product a serious look!
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> It will be easier to walk you through this over the phone. I am also sending a description of Achievement to you in a separate email. I can walk you through how to read that too.
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> MICHAEL J. EARLYWINE | Managing Director Institutional Trading
> Burnham Securities Inc. | 40 West 57th Street | 28th Floor | New York, NY 10019
> 212 603 7586w | 917 804 6422c |