How to Select the Right OSJ for Your Practice
Are you an independently-minded financial professional looking to enhance your practice by joining with an OSJ (or larger enterprise)? This decision could result in added business and expansion opportunities for you. At the same time, choosing the right one for your practice is critical.
Selecting an optimal partner will ensure that your needs are met while providing access to new services, technologies, and resources that can help drive success. In this article, we’ll discuss the criteria for selecting the best OSJ for your firm, such as its experience, office culture, and capabilities.
This article discusses the following:
- What is an OSJ/Large Enterprise?
- Is the OSJ model right for your practice?
- The Top 3 questions to ask a potential OSJ
- Key reasons why independent RIAs & IARs partner with an OSJ
- How solo financial professionals leverage OSJs to win new business
- Compliance oversight: The importance of partnering with an OSJ
The letters “OSJ” are an acronym for “Office of Supervisory Jurisdiction.” This firm’s purpose is to provide oversight to financial industry professionals, ensuring they comply with all state and federal regulations. Ideally, this is done without compromising an independent firm’s identity and branding. The day-to-day role of an OSJ is overseeing a financial firm’s activities and reviewing its practices to ensure that they adhere to all applicable laws and regulations. This includes things like ensuring that clients receive suitable investment advice, reviewing correspondence, monitoring trade activity, and providing guidance on investment options.
Some large enterprises provide additional services, like marketing support, business development resources, and practice management coaching. Fundamentally, allying with the right one should ensure that your firm stays compliant with laws and regulations while not compromising your ability to deliver top-tier service to your clients. It can also help protect the business that you have built, providing a level of oversight that other entities within your organization can’t necessarily.
Just as importantly, a truly success-oriented OSJ will ensure that you have friendly, intelligent, and thoughtful backup: Their services will include access to experienced, accredited financial industry professionals who’re familiar with your challenges and needs, firsthand—because they’ve been there.
Finally, having an OSJ can help you stay informed about changes in regulations or new developments in the industry. We habitually keep up with new rules. So, when you can’t spare the time from advising, we can help you keep up to date. This safety net can keep you free of trouble, but it can also keep you better prepared for competition in your niche and the marketplace.
We all work in the financial industry, but every firm tends to have its own style (sometimes even within a niche). In other words, as eager as an OSJ like Evolution is to help you, our services aren’t a blind, one-size-fits-all solution.
We typically make a noticeable difference for firms with whom we’re a good fit. For instance, if you prize your independence to the point of keeping your branding, that’s fine with us. Nevertheless, not every large enterprise sees things the same way. These resources at other large enterprises, unfortunately, don’t always come with much autonomy.
A typical OSJ identifies any potential risks associated with your activities, taking appropriate action to mitigate those risks. In addition to the usual supervisory duties, they act as a sort of firewall, providing final sign-off authority on transactions or client accounts.
Some large enterprises have in-house, proprietary asset management models to leverage while serving you. This may get pitched as added efficiency, but it often benefits them by adding an additional charge(s).
At Evolution Financial Advisors, our business philosophy prevents us from doing this. It’s a line we never cross. In fact, we believe the industry is already putting forth better products, so there’s really no need to reinvent the wheel.
Another area you might want to consider when evaluating candidate OSJs is their services’ scalability. For example, we sometimes work with firms on a dual-registered (“hybrid”) affiliation. Our ability to scale through other relationships this way makes it easy for financial professionals of all backgrounds to partner with us.
It helps if your cultures are compatible, as well. While shared professional interests and goals should factor in, selecting a large enterprise that shares your values is also important. This can determine how well you’ll work together over the long haul. For instance, we see our advocacy as a value-add.
Rather than seek the interests of one firm over another, we are decidedly non-competitive. We’re passionate about seeking all of our financial professionals' success. That’s because, ideally, we don’t just want you doing business with us. We’d prefer that you join our growing family, keep your own branding, and work with us for years to come.
Nobody knows how your team operates better than you, so it’s well worth the time to learn how an OSJ you’re considering partnering with operates. Understanding the potential pros, cons, and responsibilities that accompany a possible working relationship before you sign on often makes determining your best choice easier.
Choosing the right large enterprise for your firm is too important of a decision to make on a whim. A well-chosen OSJ can help you manage compliance and provide guidance on how to run your business model more efficiently.
Clearly, you have many options to choose from. That’s why we have the following questions to help you measure potential OSJs’ qualifications.
1. “What Services Do You Offer?”
The first thing to ask is what services a promising candidate offers. Are they solely providing compliance support? Do they provide any other services, such as product selection, marketing support, or financial planning insights? A comprehensive understanding of their offerings can help you determine if they align with your goals, needs, and culture.
2. “What Resources Do You Have Available?”
It’s important to understand what a candidate OSJ would have at its disposal for you: Do they have access to up-to-date technology and research tools? Do they provide access to thought leaders in specific areas, such as tax law or retirement planning? Learning which resources they have available can help give you confidence that they will (or won’t) be able to provide the quality of support you need over the long term.
3. “How Long Have You Been in Business?”
Generally speaking, the longer an OSJ has been around, the more confident you can be that they understand today’s ever-changing regulatory environment. A well-established large enterprise tends to know the best ways of navigating it for your benefit.
Some OSJs may also have existing relationships with regulators, as well. If they do, it may prove beneficial for understanding an ever-more complex regulatory landscape.
First, you gain access to expanded back-office operations support and compliance help. This should free up your focus for building your practice rather than having to handle the day-to-day operations of running a financial firm. Additionally, if you partner with an OSJ specializing in regulatory issues, this helps ensure that you remain optimally compliant.
Just as importantly, at Evolution, our standard services include insights from our team of seasoned professionals. We don’t boss you around, but we make a point of always being available for questions and opinions, should you need an experienced sounding board. Joining our family means gaining more than technical back-office task support; it nets you friendly industry allies.
Next, a quality OSJ will supplement your back-office operations. This can include providing you access to tools for helping clients with portfolio management, tax planning, financial planning, estate planning, retirement planning, compliance support, and more.
Lastly, partnering with an OSJ can give you access to new markets and client networks that might not be available to your firm otherwise. For example, another financial firm we work with may be able to help you non-competitively. This can provide access to group thought, peer sharing, succession and acquisition opportunities, and more. Partnering with an OSJ already networked toward your niche can expand your outreach.
It’s no secret: The financial industry has become increasingly competitive. With so many firms vying for a market share (of a single niche, in some cases), it can be difficult for a solo advisor to stand out. Especially when you lack the resources available to larger firms, it gets hard to compete, fast.
Fortunately, there are several ways in which an OSJ can help you win new business. The right one can make it possible to recoup work hours that you’d otherwise devote to back office and compliance tasks. Utilizing their support by delegating those jobs can, for instance, translate into additional time for client development and marketing efforts.
Meanwhile, there’s also a potential prestige boost: Many investors prefer to work with well-established firms. So, partnering with an OSJ can provide credibility and trustworthiness that would otherwise be hard to come by quickly on your own. This, in turn, can translate into increased client confidence.
Again, an experienced partner can also provide rare, valuable insights into the market. We tend to know where the mines are buried, so to speak—so you have the advantage of consulting us in order to make better-informed decisions. This might be a competitive edge when pitching prospects on why they should choose you over another firm.
As wealth management firms continue to grow and expand, it’s increasingly important to partner with an ally capable of providing the compliance oversight you need. An OSJ’s inherent value may be clearest here, where the standards can shift from year to year.
The right enterprise can help you stay compliant with all applicable laws and regulations from the U.S. Securities and Exchange Commission (SEC), FINRA, and state regulators. In other words, by helping you avoid omissions, errors, and malfeasance in today’s era of increasing regulatory oversight, an OSJ could potentially save your practice.
We’re not saying that to be melodramatic. Our goal is to see financial professionals like you succeed, long-term. There are far more reasons why partnering with an OSJ is an investment in your firm’s future than we have space remaining here to cover.
In addition to ensuring compliance oversight, teaming with a large enterprise can net you best practice recommendations, software solutions (to help streamline processes within the firm while increasing data security measures), and much more.
At Evolution, we especially mean the “teaming” part: Your firm’s success is tied directly to ours, so it’s in our own best interest to pursue every possible avenue for your long-term growth. However, there’s much more to our approach than what we get out of things.
Evolution Financial Advisors remains, philosophically, devoted to advocacy. So, to us, it’s about working together as a family, helping you and your team with no agenda beyond seeing you grow. We’re ready to scale our services to your unique, developing needs, and celebrate all of the milestones with you along the way.
Contact us today.
Securities offered through Securities America, Inc. Member FINRA/SIPC. Advisory services offered through Securities America Advisors. Evolution Financial Advisors is not affiliated with the Securities America companies. Securities America does not offer tax or legal services