Before You Sign On The Dotted Line: Six Keys To Choosing The Right Firm

Think About More Than Basic Considerations When Choosing A Long-Term Partner 

As we finish the year, independent financial advisors considering a new firm tend to focus intensely on their choices. If you are among them, you’ve probably already completed due diligence, had several home office visits and narrowed your list of candidates. 

But before you sign on the dotted line, there are a few more things you should consider. Here are six key questions – all of which transcend basic concerns such as products, tech stacks and service standards – to determine which firm will provide you the best opportunity for long-term success.

Will They Help You Manage And Grow Your Business?

Does the firm have a deep business consulting and practice management bench that embraces coaching and training? Or is it everyone for themselves? As a small business owner, you know how important it is to improve your skillset continually. Your broker-dealer partner should have a stable of resources and tools, either internally or through third-party partnerships, to help you better manage your practice and grow your business. 

Will They Help You Develop A Succession Plan?

Advisors need a succession plan

Every advisor knows they need a succession plan, yet few have one. As an independent advisor, you owe it to yourself, your employees, your clients and your family to take care of your business in case something happens to you. The right firm will assist you through the process of determining your needs, developing a plan, and guiding you through the process and execution to make it as painless as possible.

Do They Have Your Back? 

Take a close look at the firm’s history of handling advisor complaints or disputes. Do they trust their affiliated advisors? While at times settling a claim is the best option, it shouldn’t be an automatic default. If you believe you are in the right, you’ll want a partner that is willing to support you.

Why Are They In Business?

Just empty words?

Is the firm privately or publicly held? Publicly held firms have obligations to their shareholders that can prioritize the bottom line, sometimes compromising advisor and client service. Also, consider whether their mission statement and core values are consistent with your own and – importantly – more than empty words. 

Will You Be More Than Just Another Rep Code?

Authenticity matters. Though sometimes tough to spot and articulate, you can typically sense when something is “off” by meeting with the various senior leaders and staff who you’ll work with most closely. 

Getting a feel for the transition process is also critical. Will the transition team get to know you and your business? Do they accommodate you, or are you expected to accommodate them? Have they offered to be on-site at the start of your transition to assist you and your office staff? And finally, will they treat you as a partner or just another rep code? 

 Compare apples to apples

Are They Competitive?

The right clearing firm can make a significant difference, so pay attention to what’s on the platform and ensure the firm makes everything available. While many tend to focus on compensation, product offerings to meet your clients’ needs can be just as important. Ask firms to provide detailed information so you can compare apples-to-apples, to help ensure that you meet your clients’ needs – now and in the future – as your business grows.

Steer clear!

Make Your Decision

Changing firms is without question a significant decision. It will have implications for years to come – and time invested in due diligence can ensure a positive experience for you, your team and your clients. While finding the right answers to all the above questions may consume significant time, it will be worth it. And if a firm cannot provide the information you are looking for – steer clear. 

Tony Montanari, SVP, Business Development, Prospera Financial Services

Tony Montanari is Senior Vice President, Business Development for Prospera Financial Services

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