Financial Institutions have a fiduciary obligation to evaluate their vendors on an ongoing basis. For Financial Institutions with an investment offering, their Broker/Dealer partner is one of these vendors that need to be evaluated. Larger Financial Institutions, typically those with more than $5b in deposits, will hire a consultant to go through a formal RFP process. The Financial Institution will be responsible for paying what could be tens of thousands of dollars to this consultant for this analysis and the end result is the Institution doesn’t make any changes.
Smaller institutions with less than $3b in deposits will typically use a senior advisor or program manager to contact a few Broker/Dealers and request some information to be sent and then with a cursory review of the information make their decision.