- What do the Payout Structures Look Like? – You clearly want to ask about payouts for commissionable products versus the advisory side of the business. For the advisory side, you’ll want to ask about the manager fees, the administrative fees the firm charges and how it all prices out. What are the rep fees? You should also request a copy of expenses, payouts and operational charges for client accounts.
- What is the Average Production of the Firm’s Advisors? – This is definitely something you want to touch on to get a sense of what percentage of the firm’s business is coming from advisory assets versus commissions. I would get a breakdown of this in order to see how well the firm aligns with where you’re at today as well as where you want to grow in the future.
- What Are My Options from a Modeling Standpoint? – If you have a lot of advisory assets and envision that area as a growing part of your business, you’ll want to know what models and types of offices the firm’s organization structure supports. Will you be required to use the broker-dealer’s corporate RIA? Will they allow you to create your own hybrid RIA or tuck in with another outside RIA? Will you need to operate as an OSJ or will the firm provide OSJ support.
There are likely many more questions you’ll want to ask throughout the due diligence process –especially once you narrow your list down further and begin home office visits. These are areas to focus on when meeting with a recruiter in order to determine the right fit. Remember to ask questions about the future as well as the here and now, as you are trying to find the partner who is setup to support the growth of your practice long-term.
Tom Daley is the founder and CEO of The Advisor Center, the industry’s largest online resource for financial advisors. For more information on the firm’s web-based community, visit www.theadvisorcenter.com.