It may make sense for you, as an independent financial professional, to partner with an Office of Supervisory Jurisdiction (OSJ) to help you manage the day-to-day tasks of your financial advisory practice.
Selecting the right OSJ for your needs may also be one of the most important decisions you can make for your practice.
An OSJ can serve as your firm’s compliance and regulatory arm, responsible for monitoring the activities performed by all parties within your organization. They can also assist you with marketing services, and business succession planning.
That’s why, when making this selection, you want to make an informed, objective decision.
To help ensure that you are choosing the right fit for your business, we have compiled six important questions that every financial firm should ask when interviewing potential OSJ partners before making a final decision.
This article discusses the following questions:
- Do we share the same values and goals?
- What sort of training and education do you provide to advisors/firms?
- How are you compensated?
- What is your compliance process?
- What type of technology and infrastructure do you offer?
- Do you offer new advisors transitional services?
1. Alignment of Goals and Values
Before partnering with an OSJ, as an independent financial advisor, you should ensure that your business goals and values align with those of the OSJ. This includes assessing the OSJ’s commitment to providing you with tools for growth, innovation, and how they support you by providing the highest level of client service using industry best practices.
Consider the OSJ’s overall culture and values. This includes its approach to client service, transparency, and ethical standards.
A strong partnership will be based on shared values and a compatible culture, so ensuring that the OSJ aligns with your beliefs and practices is essential for your long-term success. A strong partnership with your OSJ fosters better collaboration and support for your firm.
2. What Sort of Education and Training Do You Provide to Financial Advisors/Firms?
The OSJ should offer ongoing training and educational resources for its financial advisor base. Evaluate the quality and accessibility of these resources and the likely service partner’s commitment to ongoing professional development.
A good match could also result in a deeper understanding of compliance regulations, learning about new products and investment strategies, and improving their overall professional development. By improving your overall professional development, you can boost your credibility and reputation in the industry, ultimately leading to increased client satisfaction and retention.
3. How Are You Compensated?
OSJ compensation is typically based on a percentage of the revenue generated by the branch offices they supervise. This is known as an override fee. For example, if a branch under the OSJ’s supervision earns $100,000 in commissions, the OSJ might receive 1-5% of that amount.
Some OSJs charge a flat fee or an administrative fee for their supervisory and compliance services. This fee helps cover the costs associated with their oversight responsibilities.
The third way an OSJ may be compensated is based on the performance or growth of the branch offices they oversee. This can include bonuses or other financial incentives for meeting certain targets or objectives.
Financial advisors who move their back office to an OSJ can experience numerous benefits, including reduced operational and compliance burdens, increased efficiency, access to cutting-edge technology platforms, and a comprehensive suite of resources tailored to help them grow their practice.
At Evolution Financial Advisors, we believe in full transparency, so you will always know what you will be paid and what you are paying for. Transparency in an OSJ partnership is of the utmost importance.
By leveraging the expertise and infrastructure of an established OSJ, you can focus on cultivating client relationships and providing exceptional service, ultimately enhancing your overall profitability and success in the industry. However, you’ll need more than this over the long haul.
Your OSJ partner should be as upfront and transparent as possible. It shouldn’t be difficult to understand how you’ll be compensated, what you’ll receive, and what you’ll be paying for.
4. What Is Your Compliance Process?
The Office of Supervisory Jurisdiction (OSJ) can play a crucial role in ensuring compliance and oversight within your financial advisory practice and through ongoing monitoring and enforcement of regulatory standards, your OSJ should provide you with a robust framework that benefits your firm in multiple ways.
By facilitating adherence to established rules and guidelines, an OSJ can help you maintain your professional integrity and credibility in the eyes of clients and regulators.
If you are an independent financial planner, an OSJ can help you remain compliant with ever-evolving regulations. Additionally, OSJs offer ongoing support and training, enabling you and your team to stay informed about industry trends, best practices, and regulatory updates.
This comprehensive compliance and oversight process safeguards the interests of your clients and advisors alike and fosters a more transparent and trustworthy financial services environment.
Unsure How To Find the Best OSJ for Your Firm? We’ve Got a Guide To Selection Here
5. What Type of Technology and Infrastructure Do You Offer?
Did you know that OSJs can offer you and your team of financial advisors a significant advantage in terms of access to cutting-edge technology platforms and infrastructure? These advanced tools and technology platforms can streamline operations, facilitate communication, and enhance your practice’s overall efficiency.
By partnering with an OSJ, you can gain access to sophisticated platforms for portfolio management, financial planning, risk assessment, and compliance monitoring. This potentially allows you to make better-informed decisions, provide more comprehensive services to your clients, and stay ahead of your competition in the rapidly evolving financial services landscape.
Additionally, having a robust technology infrastructure provided by a service partner that the OSJ oversees can alleviate the burden of managing complex IT systems for independent financial advisors. OSJs are constantly looking to upgrade technology solutions and provide access to teams that help maintain and upgrade them, ensuring that you and your team have continuous access to the latest tools and features.
This means that you can focus on what you do best—providing high-quality financial advice to your clients—without worrying about technology management or the costs associated with implementing and maintaining these systems on your own.
In this way, an OSJ provides valuable support and resources that, as an independent advisor, you may struggle to access. This can ultimately promote a higher level of service and client satisfaction.
6. Do You Offer New Advisors Transitional Services?
If you are considering leaving your current employer and transitioning to become an independent financial professional, you will need to address many challenges and hurdles during this process. When interviewing OSJs, it’s important to understand what types of transitional and onboarding services they provide.
- Better OSJs help streamline the process by offering access to cutting-edge technology platforms, trading and investment tools, research, and CRM systems.
- Quality service partners also facilitate ongoing training, coaching, and mentoring to help advisors develop their skills and grow their businesses. This comprehensive support enables you and your team to focus on building strong client relationships while the OSJ handles the time-consuming complexities of running an independent practice.
- A good OSJ will provide a customized transition experience, as well. Things must go as smoothly as possible for you.
By carefully considering these questions, you should find an OSJ partner who will help you thrive, maintain compliance, and deliver exceptional service to your clients.
Contact us to learn what it’s like to partner with an OSJ and join a growing family.
