At the end of the day, financial advisors who are part of a Super-OSJ group need to know that these changes are happening not only to strengthen short-term P&L, but to support long-term growth and success for its advisors, including through effective cost containment.
Beware Of ‘Preserving Culture’ As A Catchphrase
It has become a common refrain for larger firms to insist that they will help small to mid-size independent broker-dealers preserve their unique culture after they move to the larger platform.
Unfortunately, these firms’ operations—which seek to maximize economies of scale by supporting as many producer groups as they can as efficiently as possible—often mean that producer groups on their platforms experience even more pressure than individual advisors to conform their businesses and culture to the larger firm’s standard template.
Firm leaders owe it to their financial advisors to dig deeper on this issue. For example, will the new broker-dealer support the Super-OSJ group continuing to hold its own national meetings in addition to attending our new broker-dealer’s national conferences (even if they’re virtual for now)? Are there instances when other Super-OSJ groups or advisors already affiliated with the new broker-dealer have felt pressured to conform to the larger firm’s processes and practices—and if so, has this negatively impacted advisor service?
Weighing The Pros And Cons
For many small to mid-size broker-dealers, the challenges of the Covid pandemic and ongoing changes in the regulatory environment have made converting to a super-OSJ or producer group more attractive than ever. But it’s important to carefully weigh all the pros and cons involved with each potential new broker-dealer partner.
Mark Contey is senior vice president of business development for LaSalle St., a family of firms encompassing an independent broker/dealer, an SEC-registered investment advisor and a provider of annuity and insurance products.