Are you a CERTIFIED FINANCIAL PLANNER™ looking for a way to grow your business and maximize operational efficiency? The OSJ (Office of Supervisory Jurisdiction) model may be your solution.
A large enterprise can potentially help reduce costs, create more efficient management structures, and reclaim work hours by acting as a central hub for managing multiple independent advisory practices. In this blog post, we dive into the specifics, analyzing this model’s benefits to help you decide whether an OSJ fits your firm.
- Economies of scale: Increased output, lower costs
- Compliance management and recouped work hours
- Practice/operational management & workflows
- Ensuring a comfortable corporate cultural fit
- Pricing, compensation, and your potential edge
Economies of Scale: Increased Output, Lower Costs
As an independent financial firm, you want to increase your output while keeping costs low. This can be a tricky balancing act. Fortunately, one way to do this is to use economies of scale. An Office of Supervisory Jurisdiction (OSJ) can facilitate this by providing access to resources that might otherwise be too expensive for a small practice to deploy.
If you’re wondering what “economies of scale” are, they are cost advantages achieved through production increases due to larger orders or operations over time. When a business takes advantage of this, it can produce more output at lower costs than it would have been able to maintain while it produced smaller quantities.
An OSJ can provide the infrastructure you need to begin. These large enterprises typically provide compliance monitoring, risk management consulting, technology setup/maintenance, and customer service training to help reduce operational costs while increasing efficiency and productivity.
In other words, an OSJ can be a great way for a small financial firm to take advantage of economies of scale without investing in the expensive resources required. Utilizing its services allows you to access the same resources that large companies use while saving time and money.
Compliance Management & Recouped Work Hours
As a financial advisor, you know that maintaining your compliance program is a time-consuming task that takes away from other business areas. There’s no getting around its seemingly ever-changing requirements. Fortunately, you do not have to tackle them alone: An OSJ can help you save time and resources by taking on some or all of your compliance management needs.
One of the primary advantages of working with one is access to professionals specializing in regulatory requirements. These professionals are often more knowledgeable about the latest rules and regulations than you may have time to be. As a result, they’re well-equipped to keep compliance issues from costing you potential penalties.
Meanwhile, delegating compliance management responsibilities to an OSJ can free up more time for growing your business. This doesn’t just mean possibly more bandwidth for client acquisition and relationship building: It can also enable you to focus on providing quality services and advice to clients without worrying about regulatory issues. This, in turn, could lead to increased client satisfaction and improved retention rates.
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Practice/Operational Management & Workflows
Working with an OSJ can help your firm improve efficiency by streamlining its operational processes. The right one will have seasoned financial professionals with a keen eye for inefficiencies in your business model, allowing them to offer insights on improving it best.
At the same time, working with a large enterprise can reduce your risk by overseeing the firm’s daily activities. For example, an OSJ may help you, as a fiduciary, avoid potential breaches of duty or errors. This means potentially avoiding legal actions or damage to your reputation.
Ensuring a Comfortable Corporate Cultural Fit
Before you start looking for the right OSJ, take some time to evaluate your core needs and values. First, it’s important to clearly understand what your company stands for. Without it, you can’t ensure that any potential partnership aligns with your values. Doing this can also help guide your search and narrow down potential options before moving forward.
It’s essential that your firm and any large enterprise you’re considering working with are on the same page about key issues such as customer service standards and operational procedures. This can help ensure that there won’t be any surprises or miscommunication later on as you work together.
To better understand the culture at an OSJ, ask questions about their employees, clients, and customer service policies during interviews. Don’t forget to do your research, either. Before making any decisions, read reviews from other customers and consider conducting background checks on your potential partner-to-be. Knowing that you are making an informed decision based on facts rather than assumptions may give you peace of mind. You’ll be doing yourself a favor by not depending on guesswork.
Research can also help you better understand each potential partner’s strengths and weaknesses. This makes it easier to weigh your options before making a final decision.
If you are a CFP ® considering a partnership with an OSJ like Evolution Financial Advisors, here are vetting questions that you can use to ensure the partnership aligns with your professional goals and standards:
Compliance and Regulatory Support
- What is your process for ensuring compliance with regulatory requirements?
- How do you handle audits and examinations from regulatory bodies?
- Can you provide examples of how you’ve helped advisors manage compliance issues in the past?
Technology and Support
- What technology platforms do you use to support financial advisors?
- How do you assist with transitioning client accounts and data?
- What kind of ongoing tech support and training do you provide?
Operational Efficiency
- How do you streamline administrative tasks for advisors?
- What systems are in place for account management and reporting?
- How do you handle client service and administrative requests?
Investment and Planning Support
- What resources and tools do you offer for investment management and financial planning?
- Do you provide model portfolios or investment research?
- How do you support advisors in creating customized financial plans for clients?
Training and Development
- What training programs do you offer for professional development?
- How often do you update your training materials to reflect changes in the industry?
- Are there opportunities for continuing education and certification support?
Compensation and Benefits
- What is your compensation structure for partnering advisors?
- Are there any hidden fees or costs we should be aware of?
- What benefits do you offer beyond standard compensation (e.g., marketing support, business development resources)?
Culture and Values
- How would you describe your firm’s culture and values?
- What is your approach to client relationships and advisor support?
- Can you provide references from current advisors who can discuss their experience working with you?
Client Experience
- How do you ensure a high-quality client experience?
- What tools and resources do you provide to enhance client communication and engagement?
- How do you handle client complaints or issues?
Growth and Scalability
- What support do you offer for business growth and scaling?
- Do you provide marketing and business development resources?
- How do you assist with succession planning and exit strategies?
Legal and Contractual Terms
- Can you provide a sample contract for review?
- What are the terms and conditions for terminating the partnership?
- Are there any restrictive covenants or non-compete clauses?
Ready to learn more about Evolution Financial Advisor’s OSJ services? Let’s connect.
