When small financial advisors apply to use the services of a brand name custodian, they often face significant challenges, such as high asset thresholds and minimal personal support, which can impact their growth and operating efficiencies. This is where a partnership with an Office of Supervisory Jurisdiction (OSJ) can be a game-changer for smaller firms seeking growth.
This blog will explore some of these benefits in more detail.
Understanding the Challenges Associated With Large Custodians
Many large custodians typically set high asset thresholds and minimum requirements, making it difficult for smaller advisory firms to meet those standards. These barriers can lead to higher fees and limited access to premium services, creating major disadvantages for smaller firms.
It’s also important to note that you may not have access to tailored solutions and support, which can significantly impact your operations and client benefits.
If personalized attention is important to you, you may struggle to find solutions for your and your client’s unique needs. You may also find that you must create workarounds that can lead to severe operating inefficiencies, hindering your firm’s ability to grow by being more competitive with bigger firms.
Lastly, it’s not uncommon for small firms to struggle under the weight of complex compliance requirements and administrative burdens imposed by the larger custodians. Many of the restrictions are designed to protect their interests—not yours or your clients’. This can drain resources while diverting attention away from core business activities like winning new clients and serving current clients.
So, what is your best alternative to working directly with a large custodian? You should consider partnering with an OSJ!
How Does an OSJ Support Smaller Financial Advisory Firms?
An OSJ can provide smaller financial advisory firms with a team of specialized compliance, operations, training, mentoring, technology, and administrative professionals to support their business activities.
With an OSJ’s support, you can focus more on client relationships and strategic growth, benefiting from the OSJ’s technology and experienced professional guidance. This support helps small firms manage their operations more efficiently and cost-effectively.
Let’s look at specific ways an OSJ can assist you in running your practice.
Operational and Compliance Support
A primary driver for financial advisors who partner with an OSJ is their operational and compliance-related services. Typically, these tasks require in-depth knowledge of industry-mandated operation guidelines and regulations, which can be a significant cost to maintain in-house. Being compliant should always be a top priority for all financial advisory firms, large or small.
When you partner with an OSJ, they can assume much of the heavy lifting associated with compliance reviews and operational workflows. Some of the services an OSJ can provide include:
- Comprehensive compliance support, including monitoring and auditing advisor activities
- Ensuring your firm adheres to industry regulations
- Provide up-to-date information on regulatory changes
- Assist with operational tasks such as account administration, documentation management, and transaction processing
Technological Solutions and Resources
You may not be aware of this, but OSJs can provide their advisors access to advanced technological tools and resources without the prohibitive costs typically associated with large custodians. These tools can enhance operational efficiency and service quality, giving small firms a competitive advantage.
Technology can help you enhance client management, streamline compliance processes, and improve operating efficiencies.
Examples of technology providers include comprehensive CRM systems, integrated financial planning software, and automated marketing solutions, which help you stay engaged with your clients, prospects, and centers of influence.
In addition to providing access to these platforms, OSJs offer ongoing training and support, ensuring that you and your team are well-versed in utilizing these technological resources.
Personalized Guidance and Mentorship
As an independent financial professional, you may face significant pressures servicing clients and growing your business. You may also feel isolated as a solo practitioner.
However, partnering with an OSJ like Evolution Financial Advisors can transform your experience, offering growth opportunities, camaraderie, and reduced isolation:
- An OSJ can assist with succession planning for those considering retirement or exiting their business. This includes finding a suitable successor within the network or providing resources to facilitate mergers or sales.
- OSJs help develop continuity plans for your practice, reassuring clients and your team that a plan is in place should something unforeseen happen to you.
- Networking within an OSJ can enhance business opportunities for all participants and make the independent role more rewarding and less daunting.
- OSJs encourage an environment where advisors can share market insights and knowledge, leading to better decision-making and more informed financial advice for clients.
- Networking can lead to partnerships on projects or accounts that might be challenging to handle alone. This collaboration fosters a sense of purpose and camaraderie and reduces feelings of isolation.
- OSJs that promote networking provide newer advisors access to experienced mentors who offer guidance, feedback, and support, making them feel included and part of a larger team. This can include the OSJ holding regular meetings and conferences, social events, and online networking opportunities.
Get to Know Evolution Financial Advisors
Evolution Financial Advisors offers a tailored and supportive environment that large custodians cannot match. Our focus on personalized guidance, mentorship, and comprehensive support services ensures that you and your team receive the attention and resources you need to thrive in a competitive marketplace.
By choosing Evolution Financial Advisors, your firm can benefit from a collaborative network of professionals that fosters knowledge sharing, business development opportunities, and continuous learning.
At Evolution, networking is a key factor in the success of our financial professionals. Collaboration often leads to better outcomes because two minds can frequently produce more results than isolated advisors working alone.
Our teams’ strength significantly impacts your practice’s success and productivity, fostering an environment where shared knowledge and collective expertise drive exceptional performance.
Ready to learn more about the services of Evolution Financial Advisors? Connect with us.
