“Must-Ask” Questions when Looking for a new Broker-Dealer!

By Matt Vigo

“Must-Ask” Questions when Looking for a new Broker-Dealer!

The fact of the matter is switching broker-dealers is actually very simple… a handful of paperwork and off you go. Furthermore, transitioning clients and accounts to a new firm may be time-consuming but can also be quite straightforward PROVIDED you find the “right” Broker-Dealer and support system.

What’s not so simple: Finding that “right” Broker-Dealer and support system!

As a result, all too often, registered representatives realize only after the dust settles and the honeymoon is over that their new firm is not what they had thought… or worse… were led to believe.

Registered Representatives must perform due diligence and conduct a thorough examination and review of the prospective Broker-Dealer prior to switching – NOT AFTER!

To help, below are “Must-Ask” questions for anyone look for a new Broker-Dealer.  

This first list of questions consists of what we call “run-of-the-mill, vanilla” questions.

  • Culture
  • Number of Registered Representatives
  • Representative to Employee Ratio
  • Turnover
  • Regulatory, Disciplinary, and Disclosure History
  • Payout Levels and Rules
  • Initial and Ongoing Fees and Costs
  • Average Representative Revenue
  • Firm’s Ideal Representative
  • Services and Support

This second list, however, includes what we call “the last Firm I’ll ever be affiliated with” questions.

  • Technology package, integration capabilities, cost
  • E&O carrier, cost, and coverage, (i.e., products, prior acts, etc.)
  • Marketing and branding systems, programs, and support
  • Do you help your Representatives grow their practices and if so, how?
  • Can I see your selling agreement list? Is your firm open to new agreements?
  • What is your Firm’s policy and/or restrictions regarding Outside Business Activities?
  • Can your firm service my business mix?
  • Does your firm provide Succession services and/or support? 
  • Can you walk me through your Sales Processing procedure!
  • Are your forms online?
  • Do you offer e-Signature?
  • What is the average turnaround time regarding sales, marketing & advertising, etc.?
  • Does your firm offer training? What about one-on-one Rep Training or Rep’s staff training?
  • Does your firm have an annual conference? Top producer conferences? Who pays for what? 
  • Ownership of the firm?
  • Management structure of the firm?
  • Business continuity plan in response to a disaster? What is the plan?
  • Succession plan should something unexpected happen to the owner(s)? What is the plan? Is it written and current?
  • Financial stability of Firm (i.e., debt, cash reserves, etc.)

It takes more than “vanilla questions” to find that Broker-Dealer you want to work with in your most productive years as well as in your transition / retirement years. Take your time. This endeavor is a “must-get-right” quest.

If you’d like to talk about Broker-Dealer transitions, send our Firm Development group an email at FD@bdops.com. We’re happy to discuss your situation!

We DELIVER great service to independent representatives! To learn more, contact Kristi Delongchamp at (888) 744-6264 or kmdelongchamp@bdops.com.

About SPS Family

The SPS Family consists of two broker-dealers, Sigma Financial Corporation and Parkland Securities, LLC; a Registered Investment Advisory firm, Sigma Planning Corporation; and a back office, known as BD Ops, LLC. The companies, based in Ann Arbor, Michigan, are under common ownership and led by an experienced executive team. The SPS Family prides itself on personal service to independent registered representatives and investment adviser representatives from across the United States. We consider our representatives family as we strive every day to provide them “Independence. DELIVERED.”

300 Parkland Plaza | Ann Arbor, MI 48103 | 888-744-6264

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