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September 15, 2019:


To make a broker-dealer change or not to make a broker-change?

Throughout my career in Business Development with different broker-dealers, I have always started off a conversation with a financial advisor by asking what they were happy about with their current broker-dealer and what has caused them to begin looking at other broker-dealer options.  Many times throughout these conversations there is one situation that has occurred that has caused the frustration level with the financial advisor to begin exploring other affiliation options.  While this isn’t good for the business of Trusted Visions LLC to tell you we always strive to do what is right by our clients, being you the financial advisor.  Making a broker-dealer change is a significant amount of work, time, impact to clients, and money, so we urge you to take the emotion out of your situation and truly examine why you are looking to make a broker-dealer change.  There are more times than not that it makes sense for you to make a change and we are here to discuss your options, but it is extremely important to understand the impact of making a change to you, your practice, and most importantly your clients.  Here is a set of questions that you need to start with before deciding if now is the time to make a broker-dealer change:


  • Is the financial stability of my current broker-dealer in jeopardy? If so, then even if you are simply looking for a plan B, which in many cases could turn into your plan A, it is a good idea to begin exploring your options.  You don’t want to be put in a position where your current firm is sold and that leaves you and your clients scrambling to make a broker-dealer change sooner than you anticipated which leaves room for mistakes to happen during the transition process.
  • Has the culture of my firm changed to the point that I have become simply a number with my current broker-dealer? Having been in the financial services industry for almost 20 years, this is the area that disturbs me the most in my profession.  While reality is that a lot of broker-dealers have had so much success over the last 5-8 years this has caused leadership of many of these firms to lose focus on the fact the reason that their firms are as successful as they are is because of you the financial advisor.  Having been with many firms throughout my career, I have seen this firsthand.  If this is the case and you no longer have direct access to Executive Leadership when a question or issue comes up, if your hold times for service has elevated, or your firm just doesn’t seem to care about your ability to service your clients, that is a major problem.  I have always said throughout my career that if your current broker-dealer isn’t going to provide you with the highest level of service and support that they and regulators expect you to provide to your clients, that is a problem.
  • Have you seen your fees continue to increase each year since you have been with your broker-dealer, but services continue to go down? If this is the case, it is important to understand that the independent broker-dealer space profit margins are continuing to get smaller and smaller.  This is no excuse for your broker-dealer to nickel and dime you as their client.  I have seen many broker-dealers add fees like home office supervision fees, DOL fees that they didn’t take away when DOL went away, etc.  There is a cost of doing business and this should be considered when you are examining your current broker-dealer but go into this with an open mind and determine what the rationale of the fees are.  When exploring other broker-dealers it is extremely understand to put together a pro-forma which we can assist you with because your gross payout isn’t always your net payout.



Here are just a few items to think about when deciding if making a broker-dealer change is the right move for you and your clients.  Sometimes it is ok to say or have a firm likes ours that tells you that staying right where you are is the right move for you, your practice, and your clients.   If making a broker-dealer change is needed allow a consulting firm like ours discuss the hard work, effort, time, and cost it takes to make a move, but also the long-term benefit of your new broker-dealer partner.  The short-term pain of making a broker-dealer change in many cases is worth the long-term gain of a new broker-dealer partner that understands your practice, your vision, and is there to truly partner with you.