Your business may greatly benefit from switching broker dealers, yet you might not notice the need for a change unless you pay attention to the telltale signs that indicate it’s time to make the shift.  Switching broker dealers will require some research and work, yet it will also lead to a litany of benefits that advance your bottom line, setting the stage for continued success. The most common response from advisors who finally switch firms is they should have done it sooner.

If you aren’t aware of what indicates that a broker dealer switch is necessary, you might not consider making a change until it is too late. Let’s take a quick look at the top signs that you might need to switch broker dealers.

Sign 1: A Lack of Progression

Merely getting by with the status quo is not enough.  If your current broker dealer faces an uphill struggle, largely brought on by losing more advisors than they add per year, those internal problems may negatively impact the quality of service provided to you.  Instead of maintaining the status quo and hoping things improve, be proactive by making a change.  Transition to a broker dealer that isn’t satisfied with merely being in survival mode and you’ll reap the rewards in the form of improved customer service, tapping into tech innovations, and receiving the top-quality service your business needs to excel.

Your broker dealer’s failure to progress ultimately impedes your ability to compete.  Stop settling for just enough.  Switch to a new broker dealer and don’t settle into a long-term relationship until you are certain the broker dealer is helping you maintain a competitive advantage.

Sign 2: High Expenses

Particularly high expenses, or expenses that aren’t justified, are a clear indication this is an opportune time to change broker dealers.  If you haven’t taken a close look at your broker dealer’s fees in terms of the overall payout, including platform fees, administration fees, errors and omissions insurance, and third-party services, now is the time to do so.

As an example, you might find your current broker dealer’s declared payout compared to your take-home pay isn’t even close.  Whether your firm pays you 90% at an independent broker dealer or 40%-50% at a wirehouse or regional firm, never look at the payout. Instead, evaluate what you take home as compared to the actual gross revenue you generate.  Those numbers and their differences can be eye-opening.  This exercise will help you realize what you are really being paid. This allows you to analyze what services or benefits you are paying for and if you think it is of value, or if you are paying for services you don’t use and it may be time to evaluate other firms.

Sign 3: Low-Quality Service

Poor service or even average service that isn’t on par with the service provided in previous financial quarters or years is a clear indication that your broker dealer is regressing.  Both large and small broker dealers have the potential to provide diminished service quality as time progresses.  The unfortunate truth is some broker dealers assume they can safely rest on their laurels after years of service.

If you feel as though your broker dealer has fallen into a comfort zone, shift to a new one that is more worthy of its keep.  When in doubt, opt for a broker dealer with the sufficient staff necessary to provide timely, high-quality service.

Sign 4: Limited Services

The breadth of broker dealer services has the potential to be just as important as the quality of those services, as well as the timeliness of customer service.  If your firm needs diverse services and your current broker dealer isn’t meeting your demands, pivot to a broker dealer that provides the services your business needs to thrive.

Investment and account options are particularly important.  If there is an insufficient number of products available, or if the broker dealer is inflexible, transition to one that provides diverse options. These may include alternative investments, or flexible fee based options to manage portfolios on a discretionary basis.  There are so many choices available in the marketplace; don’t settle with a firm that doesn’t share your vision as to how to work with your clients.

Sign 5: Lack of Technical Innovation Including Automation

Your broker dealer’s automation has the potential to save you time, money, and effort.  If there are few automation options, or if the automation features are comparably simple, shift your attention to broker dealers that have fully embraced the automation revolution.  As an example, a firm that has fully embraced e-signatures will empower you to go paperless in your office which saves you time and money in paperwork and storage.

Choose a broker dealer that empowers you to exert full control through the use of high-tech automated features and you’ll agree making the change was worth the time and effort.

Schedule a Consultation with Bridgemark Strategies

Our team is here to facilitate your broker dealer or RIA search.  Do not attempt to make this transition on your own.  Lean on our recruiters and consultants for your merger, sale, succession plan, or other major pivot and our guidance will steer you toward the optimal outcome.  Reach out to us today to schedule an initial consultation.  You can contact us by phone at (704)288-4008 or on the web through our contact form.