Considerations for Financial Advisors Evaluating Independent Broker Dealers

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Bethany Patrick
8 years ago
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Considerations for Financial Advisors Evaluating Independent Broker Dealers 36 Cattano Avenue, Morristown, NJ 07960 Phone 908-879-1002 www.diamond-consultants.

1 Considerations for Financial Advisors Evaluating Independent Broker Dealers 36 Cattano Avenue, Morristown, NJ Phone This document is designed as a guide to assist you in your search to reach your full potential as a financial advisor. It is intended as a worksheet only. It is not, by any means, an inclusive list of all the questions or issues that you might need to investigate regarding your specific book of business or client base. This document was created by Diamond Consultants as a courtesy to its candidates and clients and is not to be duplicated without express permission. Exclusive property of Diamond Consultants and its clients. All rights reserved Diamond Consultants

It is not, by any means, an inclusive list of all the questions or issues that you might need to investigate regarding your specific book of business or client base.

2 Firm Demographics: Quality of firm/ranking /status Name of Firms Number of independent advisor groups nationwide? Average advisor production? Firm s history Firm s compliance history Niche market for firm Can you describe the demographics of your advisors? Who is your ideal advisor? What differentiates your firm from others? Environment that promotes growth: Accessibility to upper management Accessibility of traders, product specialists, and technology support Commitment of resources toward marketing Potential to join forces with existing OSJ How will I structure a relationship with a potential partner, junior broker or cold caller? Can I become my own RIA? Does the firm have an open architecture that would allow me to create other businesses to service clients complete financial needs? : eg: whole life insurance, long term disability, extended care, tax preparation, trust services Does the firm allow financial planning for a fee in lieu of commissions? Does the firm allow me to piggy back on to marketing efforts & marry my image with the brand name? Does the firm allow an advisor to maintain unrelated business interests? 2 P a g e

Environment that promotes growth: Accessibility to upper management Accessibility of traders, product specialists, and technology support Commitment of resources toward marketing Potential to join

3 Support for identifying, structuring and financing acquisitions? Whom does the firm see as the client? What are the corporate goals? What is the mission? (of the B/D) Are there any plans for consolidation? Home Office Support: Ability of support staff to answer questions and get things done Ease of doing business Transition Support Compliance Procedures and support Product, Service and Technology: Ability to service the needs of high net worth clients Clearing arrangement Research capabilities/can I utilize 3rd party research? Who pays? State of the art technology - performance reporting, scanning/image technology, document storage, aggregation of client accounts Product Platform- eg: SMA s, discretionary managed money, bond inventory, options, derivatives, collars, alternative investments, estate planning & trusts, block trading, insurance, annuities, 529 plans, insurance - premium financing, IPO s, charitable giving/philanthropic planning, concentrated positions, restricted stock, asset protection, tax planning, retirement distribution planning, retirement planning Credit and lending capabilities Ability to add money managers, or funds or other products to platform to suit broker needs Ability to do international business Banking capabilities- check writing/atm access/bill payment/credit card etc. 3 P a g e

Home Office Support: Ability of support staff to answer questions and get things done Ease of doing business Transition Support Compliance Procedures and support Product, Service and Technology:

4 Performance reporting Wealth Management Capabilities: Will I be a part of a differentiated platform that supports advisors who service high net worth clients? If so, how many advisors are part of this platform? Does it work with a separate operating system? Will there be access to designer products that appeal to high net worth clients; ie: a differentiated product set? Will there be professional development programs designed to further my education and skills in servicing the high net worth market? Who do you consider to be your biggest competitors in this space? Can I manage money on a discretionary basis? Business Mix: Will the firm allow me to run a hybrid business- retail and institutional? Tolerance for different business mixes- eg: fee based vs. transactional Ticket charges on transactional business Broker Support & Firm Capabilities Advanced product training Marketing Recruiting of additional brokers How long does it take to get sales material approved? How big is the staff? What are their credentials? How often will you be performing audits? How do you prepare me to pass an audit? The Transition Process: Does the firm assist in finding/financing real estate space? 4 P a g e

Will there be access to designer products that appeal to high net worth clients; ie: a differentiated product set?

5 ACAT Process Ability to name your OSJ or must you use the firm s name Staffing assistance Compensation: Transition package? Payout (Grid) Deferred compensation package Ticket charges, technology and compliance etc. fees Ability to charge fees in lieu of commission Other charges- ask for a pro forma to be prepared Ability to charge fees at broker s discretion Does the firm have a group health insurance policy that I can participate in? Costs? Length of contract - if any Sales support Assistance with compliance issues (past and present) - regulatory issues, E&O costs Succession Planning: When I get close to retirement how will you help me to find a buyer to purchase my business? 5 P a g e

fees Ability to charge fees in lieu of commission Other charges- ask for a pro forma to be prepared Ability to charge fees at broker s discretion Does the firm have a group

6 Other: If my attorney suggests some changes in the contract, are you willing to work it out before I sign on? 6 P a g e

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Evaluation For Going Independent. 36 Cattano Avenue, Morristown, NJ 07960 Phone 908-879-1002 www.diamond-consultants.com

Evaluation For Going Independent 36 Cattano Avenue, Morristown, NJ 07960 Phone 908-879-1002 www.diamond-consultants.com This document is designed as a guide to assist you in your search to reach your full