What's new in today's move to independence

Jul 10, 2018 @ 12:01 am

The following is a new white paper produced by Sigma Financial Corporation & Parkland Securities, LLC and the InvestmentNews Content Strategy Studio, “How to Determine if a Broker-Dealer is Right for You: Six questions advisors must ask about the independent model”:

Traditionally, the main drivers of advisors' moves to affiliate with an independent broker-dealer have been the promise of greater compensation and the freedom to do business in ways that best suit their clients.

Those drivers still apply, but advisors have come to realize that independence now can be the route to achieving personal and business goals that were set aside to meet the demands of employers or their current broker-dealer.

Today, advisors have the opportunity to select a broker-dealer who best matches and supports their personality, skills, business niche and operating style, as well as their specific support requirements in the areas of technology, service and compliance. The key, of course, is for advisors to identify clearly what they are seeking and to be able to assess whether a broker-dealer they are considering truly meets their needs.

This white paper is intended to help advisors crystalize their thinking and improve decision-making when grappling with questions regarding independence and the firm with which to affiliate.

It includes an issue-by-issue rundown of the support factors advisors should consider when evaluating a broker-dealer.

It also includes six questions advisors must ask themselves before making a move. These questions are based on the experiences of a senior broker-dealer executive who has helped scores of advisors make the transition to independence, as well as move from one independent broker-dealer to another.

Broker-Dealer Support Factors to Consider: Support for your business objectives

Some advisors choose independence so they can maintain their business the way it is, without any external pressure to grow or change. Other advisors seek independence so they can expand their business aggressively, increasing its long-term value and their current income. Others may have different business goals, such as wishing to pursue a market niche that their current broker-dealer environment doesn't readily support, or even winding down their business as they approach retirement.

Whatever their business objective, advisors looking for a new, independent affiliation should consider how well a prospective broker-dealer will be able to help an advisor achieve his or her goals. Levels of support, as well as tools and product offerings, vary among broker-dealers.

While many firms ostensibly may offer everything an advisor wishes or needs, the thoroughness of their offerings and their expertise may not match their claims. This is particularly the case in the area of marketing, technology and practice management support.

To help determine whether a firm can deliver on its promises in the area of business-building, advisors should ask to speak with current affiliated advisors whose businesses and are similar to their own. If growth is on the agenda, advisors also should inquire about the extent to which a broker-dealer supports or encourages the recruitment of brokers to work with its affiliated advisors.

Also inquire about whether the broker-dealer encourages or facilitates the acquisition of practices or blocks of business among its affiliates. For example, some firms support the growth of younger advisors' businesses by helping to arrange transitions with older advisors who have developed exit and retirement plans. Others encourage or facilitate other kinds of deals, which may include financing arrangements.

0
Comments

What do you think?

View comments

Recommended for you

B-D Data Center

Use InvestmentNews' B-D Data Center to find exclusive information and intelligence about the independent broker-dealer industry.

Rank Broker-dealers by

Upcoming Event

Oct 23

Conference

Women Adviser Summit - San Francisco

The InvestmentNews Women Adviser Summit, a one-day workshop now held in four cities due to popular demand, is uniquely designed for the sophisticated female adviser who wants to take her personal and professional self to the next level.... Learn more

Featured video

INTV

Keep this top of mind when you approach a prospect

Focus on competence, and other business development tips from advisers at the InvestmentNews Women Adviser Summit in Denver.

Latest news & opinion

Envestnet Tamarac partners with Schwab, TD on digital account openings

Auto-filling documents designed to make onboarding more efficient for RIAs and more convenient for clients.

Universal life insurance lawsuits underscore product risk

Sudden cost increases could cause clients to pay much higher annual premiums — or lapse their policies.

10 least affordable U.S. cities for renters

Based on average salaries and rents, here are the least affordable U.S. cities for renters, according to businessstudent.com.

10 countries where your clients should consider retiring

These countries offer the greatest security for their retirees, according to the 2018 Natixis Global Retirement Index.

10 most affordable U.S. cities for renters

Here are the U.S. cities that are most affordable for renters, according to Business Student.com, which compared the cost of rent to average salaries.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print