Super OSJs and their advisors should approach future strategy by acknowledging that, to be sure, not all super OSJs will thrive in the future, but the most successful organizations in this space will be those that actively build the best possible infrastructure to create sustained value-add to advisors. Training programs, succession planning and access to third-party vendors at more competitive price points are a good place to start.
At the same time, this is a good time for super-OSJ groups to recognize that mere “recruiting” campaigns fail to produce the best long-term fit in many cases. Super OSJs fixated on adding as many advisors as possible tend to overlook the specific personality, book of business and career goals of each recruit. This could ultimately result in a high churn rate that vexes the IBD and hurts the super OSJ’s broader reputation. A more consultative approach that focuses on compatibility and a smooth onboarding process that sets the advisors up for success could mark the real difference between success and failure in the future for super OSJs.
Is a significant shakeout going to happen in the foreseeable future for super OSJs?
Yes, but only in the sense that the industry is heading for a broader shakeout for many firms of all business models across the board — not just super OSJs.
The bottom line needs to be about more than the bottom line. Super OSJs, IBDs and any other kind of business in the independent financial advice needs to offer more than a pure margin play for experienced and successful advisors to grow and succeed over the long run.
Jeff Nash is the CEO of BridgeMark Strategies, a strategy consultancy providing advisor transition solutions, executive recruiting and M&A advisory services for the independent financial advice industry.