Switching broker-dealers can be a little intimidating. But if you know what questions to ask, you can gain more confidence as you navigate the process. The goal is to make a change that provides you greater stability, benefits, and peace of mind. To find the right broker-dealer, consider asking these five important questions.

If you need further assistance, contact our team at Bridgemark Strategies for a complimentary consultation. With over 60 years of collective experience in coaching and consulting with advisors and RIA firms, we’re confident that we can help save you time while providing you with solutions that are customized to your unique needs.

5 Questions to Ask Before Switching Broker-Dealers

To find the right broker-dealer, consider asking these five important questions.

1. What Services Do You Offer?

This question is foundational to all of the rest. Remember that broker-dealers can represent wirehouses, which may sell their own products, but they can also be independent or insurance company-owned broker-dealers that have proprietary products.

This is an important consideration if you’re searching for a broker-dealer to provide you with investment products. Typically a wirehouse can offer the full range of their client’s needs including both lending and asset management solutions, while an independent broker-dealer may provide greater flexibility.  Every firm has its own unique strengths and weaknesses and it’s important to understand both when shopping firms.

If you are looking for a wider range of support, such as:

  • Registered investment advisor (RIA) services
  • Coaching and guidance
  • Practice management
  • Advanced business services (mergers/acquisitions)

Carefully research the services and areas of specialization of each broker-dealer, and find the right service provider that aligns with your financial goals.

2. How Are Your Fees Determined?

One of the most important things to compare when evaluating broker-dealers is the cost of their services. Broadly speaking, broker-dealers rely on one of two approaches.

Payout, for example, the payout rate you receive from the broker-dealer as a percentage of what fees and commissions you earn.  This rate, while important often is only a part of the total fees being charged by the broker-dealer.

Fees, Fees are another way a broker-dealer makes money and changes an advisor’s behavior.  For example, if a broker-dealer assesses a fee on smaller accounts it may change the way an advisor approaches small accounts.

Fees being charged will vary greatly by broker-dealer.  Independent BDs may have some of the highest fees as compared to wirehouse bds.  Never focus just on payout, understand the different fees and even restrictions and rules impacting how you make money and the services you provide your clients.

3. What Technological Platforms Do You Use?

Today’s financial professionals rely on a variety of software tools and technological platforms. Many of these platforms provide communication and insight between you and your broker-dealer. With the right technology, you enjoy greater efficiency in how you work with your clients.

You may also want to look into such factors as:

  • Integration capacity
  • Online forms and e-signature capability
  • Automation and client reporting tools

But the reason you need to ask this question before changing broker-dealers is to understand how their platform integrates with your existing systems. For instance, your existing system may contain the proprietary technology of your current broker-dealer. During the switch, try to gather information on what will happen to minimize disruption and make a frictionless transition from one firm to the next.

4. How Do You Handle Regulatory Issues?

Regulatory or compliance issues are never discussed until they are an issue.  This is an area that would help a lot of advisors to make better decisions when changing firms.

Most people think of regulatory or compliance issues as negative, but they should be evaluated as positive.  What will the firm permit?  How do they support your goals?  What if you would like to expand your business, will they let you?  These are not just important issues, but they can literally become deal-breakers.

5. What Is Your Coaching and Development Strategy?

A coaching and development strategy starts with a successful transition but is integrated with the entire service offering from the BD.  What good are products or technology if you don’t know they exist and how to use them? Do you want a broker-dealer that provides guidance as a core part of their services?  Will they help you grow your business and how?  If this is important to you, then additional questions to ask such as how will they help you?  What resources they have are just as important.

Get the Help You Need with Bridgemark Strategies

We hope you’ve found this guide to switching broker-dealers helpful! If you’re ready to make the switch, reach out to our team at Bridgemark Strategies.

Bridgemark understands the complexity of switching between broker-dealers. We also understand the importance of having a trusted name on your side as you navigate the process from start to finish. Schedule a complimentary consultation today to discuss how to achieve your financial goals.