The 4 C’s for Choosing a Third-Party Broker-Dealer

We continue to believe that the next decade will be transformational in the Commercial Banking and Credit Union Financial Advice space.  Selecting the right Third-Party Broker-Dealer (TPBD) for your institution and your clients/members is critical.    

We are supposed to focus on the “four C’s” when choosing diamonds. In this blog, we break down our 4 C’s for evaluating and choosing a TPBD. 


Do the core values of the TPBD line up with the values and culture you have worked so hard to develop? Most TPBD’s materially demonstrate their own values system through beautifully prepared marketing material. The TPBD that cares about the cultural fit (the Connection) will also spend time learning about your institutions’ core values, culture, goals & aspirations. 

A strong presentation that demonstrates a firm’s capabilities is absolutely important. But it’s only one part of the picture. TPBD’s that also take the time to learn more about your individual situation and story tend to develop into long-term, mutually beneficial partnerships.


Simply put – does the TPBD offer the products and services your current team or de novo Advice Platform needs. Most well-known TPBD’s have very robust platforms. This is generally not an issue unless you are with a lesser-known or smaller TPBD or your team is niche driven with a certain specialty (ie; insurance, annuities, planning, muni-bonds, etc). We encourage advice platform diversification with all our clients (more on that in another blog post).

Once you have established that the TPBD has the product Capacity and Coverage you need, the next thing to consider is cost. This is often overlooked but is very important. Product and service costs tend to be fixed for most TPBD’s and those costs range from $0 to fairly expensive depending on the TPBD. 


If you have ever gone through a poorly managed bank or credit union M&A (regardless of the side you were on), then you will understand our third “C.” Converting or transitioning an existing Advice Platform from one firm to another is as complex as M&A in the financial industry. There are a lot of moving parts, and it can easily turn into a negative experience that will cost time, money, and momentum. All TPBD’s have conversion/transition programs in place but not all are equal. We are often surprised at the differences in programs with the top TPBD’s in the market.

The ability to seamlessly transition an existing Advice Platform from one firm to another is critical, but it does not stop with the platform conversion. You will lose Advisors, and you will want to grow your platform opportunistically by hiring new Advisors. If your TPBD has a weak conversion program, it will directly impact your ability to grow. 

Our Top Four Conversion Elements:

  1. Preparation
  2. Transition Capital
  3. Client Experience
  4. On-Boarding Support


It should be non-negotiable that your TPBD has the resources, tools, and solutions that will help grow your Advice Platform, find new clients for multiple lines of business, and deepen relationships with existing clients and members.

Community wraps Connection, Capacity & Coverage, and Conversion all together with a nice bow. How is your current TPBD helping you grow your Advice Platform? Are they helping your Advice Platform Advisors reach their full potential? And how are they helping you grow your bank or credit union?? The two are symbiotic, much like a Clownfish and Anemone that live in the ocean (yes, we love our office saltwater reef tank!). The Clownfish and Anemone can live just fine without each other. But when they are together, they thrive and benefit from each other, just like an Advice Platform attached to a Bank or CU can thrive and benefit from each other – with the right third-party broker-dealer.

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