OSJs play a pivotal role in the wealth management industry that often goes unrecognized.  If you think about it, OSJs have enabled the independent broker-dealer industry to grow exponentially in the past few years. That’s because OSJs play a critical support role for independent financial advisors who want to own their businesses.

OSJs in Western New York and throughout the country have assisted countless independent financial advisors in their quest to streamline, enhance, and grow their businesses by moving many of the day-to-day tasks of running an advisor practice to the capable hands of experts at an OSJ. 

This article will explore why more independent financial professionals are moving away from historical business models and partnering with an OSJ.  We will also look at the factors that can help you decide if you should use your existing broker-dealer for supervisory oversight, or partner with an OSJ for those services as well as other back office and networking opportunities to build a business you own and operate. 

The Growing Trend to Outsource

As an independent financial professional, you more than likely wear many hats: operations, compliance, marketing, chief investment officer, financial planner, and customer service, to name a few. The reality is that there are too many hats, and it can be overwhelming! 

When you partner either directly with a broker-dealer or an OSJ, many of these tasks can be outsourced to teams of specialized professionals, giving you more time to focus on what is most important: adding new clients and serving current clients. There are certain tasks that only you can perform.

If you’ve decided to seek help with your day-to-day operations, the next question is: 

Should you partner with an OSJ or directly with a broker-dealer?  

Pros of Partnering with an OSJ

Here are a few highlights of why more independent financial professionals are moving toward the OSJ model:

  • Supervisory Responsibilities: OSJs are responsible for overseeing the activities of financial advisors and their branch office activities. This includes monitoring and enforcing activities consistent with current financial regulations ensuring advisors adhere to specified industry standards while maintaining ethical relationships with their clients. This gives you and your clients the confidence that the oversight of their funds is compliant.
  • Compliance Support: An essential function of OSJs is to assist financial advisors in understanding and adhering to complex regulatory requirements. This support can include updating new regulations, offering training when needed, and ensuring advisors comply with current industry regulations.
  • Operational Support: Besides compliance, higher-quality OSJs also provide operational support. This can include assistance with administrative tasks, technology support, and guidance on best practices for running a financial advisory business more profitably.
  • Risk Management: OSJs identify and manage certain risks associated with financial advisory practices. This includes monitoring potential conflicts of interest, reviewing financial transactions for any signs of irregularities, and ensuring advisors operate within the legal and ethical boundaries of the financial industry.
  • Resource and Vendor Negotiations: As they often oversee multiple advisors or branches, OSJs have more leverage for negotiating better terms with vendors and other service providers, providing financial advisors better access to state-of-the-art tools and services at more favorable prices.
  • Support for Procedures: Paperwork can seem boring, but OSJs can assist in establishing and enforcing procedures that impact independent financial advisors’ regulatory compliance. An OSJ can help ensure you’ve dotted the  “I”s and crossed the “T”s.  Compliance matters. 
  • Scalable Businesses: Many OSJs have built scalable business platforms that benefit independent financial professionals.
  • Training and Development:  The best OSJs will provide training programs and development opportunities to further advisors’ knowledge and skills related to financial planning, investing, risk management, tax, and marketing. 
  • Networking Opportunities: You may sometimes feel alone as an independent financial professional.  Many OSJs, such as Evolution Financial Advisors, believe in fostering a family atmosphere for their advisors.  You can meet other professionals with similar goals to foster new partnerships and share best practices. 
  • Marketing and Business Development Support: Some OSJs offer marketing and business development support to help independent professionals grow their client bases.  For example, OSJs can help you develop marketing strategies that are based on previous successes and your own unique business. Think of the OSJ as a clearinghouse for new marketing ideas. These services can help advisors convert more leads into prospects (mutual interest) and more prospects into revenue-producing clients.   
  • Succession Planning:  Another way OSJs can assist independent financial advisors is with succession planning for their firm. What happens when you want to retire? Or what about connecting with other financial professionals who want to buy practices or sell their businesses? Some independent financial advisors are seeking back-ups for their businesses. OSJs can help. 
  • Customized Services: Depending on the OSJ, various tailored services may be available to meet the unique needs of independent financial professionals.

Considerations of Working Directly With an Independent Broker-Dealer

Independent broker-dealers may offer more services, which can appeal to some financial professionals. However, the following are a few considerations that should impact your decision. 

  • Limited Supervisory Support: Working directly with a broker-dealer may need more tailored supervisory support, which an OSJ can provide. 
  • Reduced Administrative Assistance: You may work with different operations or admin persons at a broker-dealer, which can impact the efficiency of your operations. In particular, if you continually work with professionals who don’t know you or your business, this can take more of your valuable time to explain complex client situations, which then puts more demands on you. 
  • Compliance Challenges: You want quick responses to your inquiries, but you may be in a long queue when you have more complex queries requiring extensive research. 
  • Networking and Community: If networking and a sense of community are important, especially as an independent financial professional, a broker-dealer relationship may not be the best fit for you. 

Why Consider Evolution Financial Advisors as Your OSJ?

Evolution Financial Advisors offers a comprehensive suite of back-office services tailored to support independent financial professionals across western New York State and beyond. 

As a full-service OSJ with years of experience, we empower you with best-in-class services and support based on best practices. 

We specialize in transition assistance.  We’re committed to facilitating a seamless and efficient transition to Evolution, prioritizing your own time and effort. We also place a major emphasis on helping you grow as a professional.  The more you know, the better prepared you are to help your clients achieve their financial goals. 

We don’t believe in self-serving comments, but we do believe our compliance team is one of the best in the financial service industry. Our number one compliance policy is providing our advisors with rapid responses and approvals to streamline their business processes.

Another important point is that we have partnered with leading software providers, so our advisors have cutting-edge financial planning software and services. 

One of our more unique strengths is providing you with a collaborative environment. Even though you operate independently, you’re always with others. We foster a collaborative atmosphere where sharing ideas can enhance your practice and your client’s experiences.

We host frequent meetings, both virtual and in-person, to keep you fully informed about the latest trends, regulations, and best practices for driving the growth of your business.

If you’re ready to talk to a leading OSJ, we invite you to connect with us

Large Enterprise/OSJ
Chris Virgil

More about the author: Chris Virgil

Chris is the assistant vice president at Evolution Financial Advisors. He works to help advisors grow their businesses and gain a sense of freedom. Chris is a business and behavioral coach working with existing EFA financial professionals to create a more fulfilling practice, streamline operations, and enhance client experience.