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Choosing a Broker-Dealer

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Aug 26, 2010 9:50 pm

I'm evaluating broker-dealer relationships to stay in the industry and keep my licenses active (expires in 5 months).  Left a wire house 1.5 yrs ago and the 2 yr time limit to get with another firm is upon me.  I freelance at the moment. I'm chatting with insurance companies doing securities business and who are looking for weekend/evening producers. What questions (other than costs to me) should I be asking these folks? This is all new to me.


Aug 27, 2010 1:06 am

What are you looking for in a b/d? What made you leave the wire house? Be very careful choosing a b/d and expect all of them to lie through their teeth to you when you are interviewing them. At least that was my experience before I went RIA and ditched the b/d connection.

That being said, cost is obviously a big consideration, as is contract level. You should also be evaluating any prospective b/d's desire to have their hand in your fixed insurance business. What sorts of OBA's are they going to be a PITA about? Do you have any that might be a concern to them? (You'd be surprised, I have a friend that played hell getting a rental property approved as an OBA by his b/d.) Make sure that their compliance framework is a fit with how you want to operate moving forward. You may also want to evaluate the b/d's ability to service your specific needs, depending on your practice. What kinds (and level) of support do you want and/or need from the b/d. What is their branch structure? If you have options to join a particular branch of an indy b/d, apply these same methods to the branch. Trust me, get stuck with a bad OSJ/branch and it will make your life miserable. Get stuck in a branch where they think VUL is God's gift to all things financial and if you don't like it, good luck getting support! (Oh, yea, and branch managers/OSJ's will also lie to you through their teeth if they want you.)

I'm sure there is more, so others will no doubt chime in, but I'd be asking myself why I wanted a b/d in my life at all. Why not go the RIA route? Of course I am biased because that is what I did at the beginning of the year and I couldn't be happier.