Not that long ago it was enough for an independent broker/dealer (IBD) to provide their advisors with basic clearing and custody and mandatory regulatory oversight. But today, with so many broker/dealers to choose from, advisors have come to expect much more. Higher levels of operational and practice management support, accelerated growth, cutting-edge technology and a strong platform are among the requirements FAs seek when considering a firm.

Yet with so many options out there, what should an IBD advisor do to make sure they are with the right broker/dealer? Is your current b/d still the one that can best serve your clients and allow you to meet your own business goals?

Checking in With Yourself

Before starting any due diligence, it’s important to have a strategy that begins with “checking in” with yourself to gain a true understanding of your requirements.

That means asking yourself:

“What do I wish my b/d would do to better support me and help me reach my goals?”
“Do I see myself with my current b/d five or 10 years from now?”
“If I had to start over, would I still choose my current b/d, given the options across the landscape and how my b/d has changed?”

Broker/Dealer Assessment: The Nine Minimum Requirements

At a minimum, all quality b/ds should offer the following:

  1. A robust platform with access to financial and estate planning, trust, insurance, lending and alternatives, etc. The platform should allow you to capture clients of all sizes including niche business.
  2. Best-in-class technology with the financial strength and commitment to an ongoing investment.
  3. The sophistication and expertise to anticipate, understand and prepare for regulatory changes. The firm should respond by creating policies and practices that are appropriate for high-quality, top advisors and not merely designed to manage to the lowest common denominator.
  4. Support for business growth—both inorganic and organic. The firm will act as a strategic partner by providing help with inorganic growth such as recruiting, identifying acquisition possibilities and providing access to capital and expertise. The firm should also have organic strategies for growth, including marketing support for new client development and the tools to support the business you want to develop.
  5. Practice management support, including operational support to maximize your team’s efficiency and the profitability of the business.
  6. Succession planning assistance by helping to develop next-generation talent through training, recruiting and human resource development.
  7. Best practices for wealth management and investment management represented by the ability to associate and share thought leadership with like-minded individuals.
  8. Fair and transparent economics so you are able to readily understand the payout and the true costs of associating with a b/d, and they should be well aligned with how you do your business.
  9. An accessible, responsive and knowledgeable support team that makes themselves available to you with answers that are meaningful and help, not hinder, your business processes.

Based on these nine criteria, you may find that your current b/d is lacking. With the many options out there for independents, why is it that some dissatisfied advisors opt to stay where they are? They typically fall into one or more of the following categories:

  1. They assume that all b/ds are essentially the same and nothing better exists.
  2. They are simply “comfortable enough.” While they have some frustrations, they are able to make it work. The challenges don’t yet impact their ability to accomplish what they need to, and they are still able to insulate clients from whatever imperfections exist.
  3. They find the array of choices overwhelming and confusing. It’s easier to stay than to take on the additional burden of exploration and moving a business.

While a move an advisor made a decade or more ago may have been right then, it doesn’t mean that the firm is still right. It would behoove you to re-evaluate periodically, even if you feel perfectly content, to confirm you are still in the best place to serve your clients.