Building a successful OSJ branch requires far more than a Series 24 license. Successful offices of supervisory jurisdiction, which supervise and provide support and services to other independents, bring real and substantial value to the table. Every week, we work with financial advisers who are ending their OSJ agreement because their OSJ offices didn't deliver on promises or provide enough support or incentive for the percentage of payout taken.
On the flip side, we also hear from OSJs that want to grow but don't understand why they aren't attracting and/or retaining advisers.
Truly successful and growing OSJ branches have a few key components in place: value-added services that attract and retain advisers, dedicated resources and broker-dealer support.
Services that offer value go above and beyond what the broker-dealer offers and come in many different forms. These include the following:
Training. Particularly for those newer to the business, offering sophisticated training that helps provide a more in-depth understanding of the marketplace and/or help firms to the next level can be particularly attractive. This is also true for established advisers who are striving to grow.
Lead generation. Some OSJs have mechanisms in place to supply new leads to advisers to build up their practices.
Specialties. Some OSJ groups offer training in business specialties, such as retirement or insurance, and offer leads in that specialty. This can be particularly helpful for those looking to break into new geographic areas, and/or wanting a more nichelike practice.
Ensemble practices. Ensemble practices offer the services of complementary professionals such as lawyers or certified public accountants so that clients can receive a wider range of interrelated services from one office, and the professionals in the office may refer business to one another. Built-in access to these types of professionals as part of the practice provides an advantage, as it often takes years to develop such referral relationships.
Hands-on services. OSJs often offer transition teams that travel to newly added offices to handle transition paperwork, and have other staff members available to handle issues as they come up in areas such as operations, registration, etc., with more expediency and ease than their broker-dealer would provide.
Although providing services beyond what your broker-dealer offers is key, it is as important to have the right broker-dealer affiliation to support you, and of which you and your advisers can feel proud. Exploring the broker-dealer's OSJ model in general can help you determine if you are looking at the right broker-dealer for you.
The right broker-dealer affiliation will offer you access to:
Recruiting support. Broker- dealers can have staffs that recruit across the country for both their broker-dealer and their branches. At some broker-dealers, recruiters are encouraged to recruit for their OSJ branches to the same degree they do for their broker-dealer directly.
Services. While OSJs may need to offer services above and beyond what their broker-dealer does, it's just as important that the broker-dealer be highly competitive in areas such as technology, marketing, payout, etc. You won't have an easy time attracting and retaining advisers to your branch if the broker-dealer behind you isn't top-notch.
Supportive OSJ model. Some broker-dealers don't allow OSJs to supervise or take an override. It is important to look at the broker-dealer's OSJ model, and its restrictions and qualifications, to make sure that it will support the goals of your OSJ model.
Successful OSJ branches dedicate the time and resources to bringing in advisers as well as making sure that their branch delivers what it promises. This means reaching out to third-party recruiters, wholesalers and other contacts to be on the lookout for those who may fit into your practice.
Remember that once you identify recruiters and others who are likely to recruit for you, it is important to make sure that they know exactly what services you provide and that you work together with them. For many OSJs, this means having a recruiter on staff full time, as well as staff members dedicated to fulfilling the promised service offerings.
The bottom line is that doing business is increasingly competitive.OSJs that give advisers an edge have a great opportunity to attract and retain advisers, if they put in the time and energy to make it happen.
Jodie Papike is executive vice president of Cross-Search, a third-party independent-broker-dealer recruiting firm.