image1 image2 image3

Financial Planning spoke to Bill Butterfield, senior analyst for Aite Group, for his insights on what it will take for OSJs to become industry elites.

Take care of advisers tech needs - beyond what the IBD does.

Independent broker-dealers typically provide advisers with work stations that are integrated with leading CRM systems. But IDBs usually arent deeply involved with tech training and support, says Butterfield, author of a recent Aite report The Evolving OSJ: Emerging Business Models.

In addition to providing tech training and support, OSJs who want to be industry leaders should license tech applications on their own, suggests Butterfield.

These OSJs are doing more than helping advisers get the most out of the tools and the technology that the broker-dealer offers, Butterfield explains. They are going outside of the BD relationship. Some offer plug-and-play technology that is very attractive to wirehouse teams looking to go independent. Others take what the BD gives them and wrap other software like MoneyGuidePro around it and then can say to advisers: Make more money with us.

Read more: MoneyGuidePro: A New Version Rockets Out of the Gate

Have a dedicated marketing specialist.

Traditional OSJs usually dont offer marketing services and support, often forcing local advisers to use outside contractors. Having a marketing specialist on staff can be a big attraction for an OSJ, says Butterfield. It helps advisers who cant do it on their own bridge the gap.

More IBDs are now offering advisers digital marketing content platforms, he notes, and OSJs who can help advisers post content online or create digital campaigns will have a competitive advantage.

Provide advisers with customized services.

Services are a big part of the OSJ value proposition and they need to stand out, Butterfield stresses. For example they can provide advisers who join their network with a ready-made succession plan as part of the onboarding process.

Too often traditional OSJs are merely just an extension of what the firms underlying BD already offers, Butterfield says.

Some mid-level OSJs, described as facilitators in the report, take the traditional model a step further by offering piecemeal services to other firms.

But industry leading super OSJs have an executable business-building plan that focuses on the needs of smaller firms they service, Butterfield says. Theyre going to have something concrete in place and not just say Weve got a guy whos thinking about retiring in a few years.


But OSJs seeking to become industry leaders also face challenges and need to be fully committed, Butterfield cautions.

For starters, they require a capital investment to build the business and attract advisory firms to join. They also need patience and a tolerance for risk. These are investments that do not necessarily pay off quickly, the Aite report warns. There is no guarantee that if they build it, advisers will come.

OSJs looking to grow and join the industry elite also need a laser-eye focus on strategy, according to Butterfield. They have to ask themselves if they have the wherewithal to focus on building a business around serving other advisers versus just dabbling in being an OSJ and holding on to their own firm.

2018  NC Peace Justice   globbers joomla templates