FREQUENTLY ASKED QUESTIONS

Have questions about our services, offerings, or just the industry as a whole? Whether you’re a client or candidate we’ve compiled a list of common questions we receive.

We start the process with a comprehensive examination of your goals and objectives. Once we understand the type of program you are looking to create, we will begin evaluating Third-Party-Mangers (TPM’s). Evaluating TPM’s takes 60-90 days. After you choose your TPM, plan 30-45 days for reviewing and negotiating the terms of your TPM Partnership Agreement. Once the Partnership Agreement is fully executed, the fun work begins – building out your wealth team!

There are several ways to establish your platform. The two most common methodologies are “dual managed” and “managed.” With dual managed programs, the financial institution is the employer of record to the financial advisors. With “managed” programs, the advisors are employed by your third-party broker-dealer but still have dotted line reporting to you. We also recommend having licensed bankers or licensed private bankers that will support both traditional banking products and wealth management.

None for the institution or existing bankers and the TPM you choose is responsible for all licensing. Your advisors will need any registrations applicable to the type of business they will transact on behalf of your shared clients. For example, Series 31 for managed futures, Series 65/66 for investment advisory, and Series 7 for the solicitation purchase and/or sale of all securities products. While it’s not recommended, you can also establish your own “supervision model”, or Office of Supervisory Jurisdiction (OSJ). For this, a Series 9, 10, or 24 would be required.

Investment Services revenue generated through your Advice Platform flows through your TPM. Your TPM tracks all accounting in detail for you and passes down a portion of the revenue less specific expenses according to your Partnership Agreement. Almost all overhead is accounted for through your TPM (licensing fees, technology, research, etc). Costs relating to real estate, office space, phones, computers are your responsibility.

There are some regulatory controls in place relating to branding that you will have to adhere to, aside from that you will have control over the branding of your wealth platform.

There is risk whenever you are adding a financial product as complicated and broad as financial advice to your financial institution’s offering. We believe choosing a TPM that is well known and takes a very conservative approach to product offering that also has a verifiably robust compliance department reduces your risk significantly. For more detailed information on risk, please read our blog on this topic. Potential Risks for Banks Using Third-Party Broker Dealers.

The short answer is financial institutions will generally spend no more time managing a “successful” wealth services platform than they do managing a commercial banking group or private banking group. “Supervisory” relating to FINRA / SEC will be the responsibility of your third-party broker-dealer unless you choose to self-clear, which we would not recommend. Most larger third-party BD’s have significant resources dedicated to supervisory systems, which have greatly reduced the time commitment required.

Absolutely – we strongly encourage identifying and having conversations with bankers and advisors in your market during the due diligence process.

Financial advisor recruiting is arguably one of the most competitive businesses out there. Top wealth firms spend billions in recruiting fees and advisor bonuses. By itself, a financial institution can’t compete for the top 40% talent. That said, if your third-party BD has a robust advisor recruiting strategy specific to financial institutions, we have found that banks and credit unions can compete in this space. For de novo programs, the third-party BD selection is critical to the successful launch and growt