Frequently Asked Questions

Working directly with firms puts you at a significant disadvantage for several reasons:

Expert Negotiation Throughout the Deal: We work with every advisor way beyond the transition process, not just making introductions. After 35+ years working with broker dealers and RIAs, we know how far we can push to get you the best possible terms. Firms respect our experience and know we understand the market standards, which gives our advisors significant leverage.

Ongoing Advisor Feedback Network: We stay in regular contact with the advisors we’ve placed. This gives us a unique competitive advantage. Our feedback network tells us the real story of how firms treat advisors post-placement, information you simply can’t get elsewhere.

Information Gap: Advisors typically only hear positives when talking to potential firms. We know the real story behind the presentations and conversations, which firms deliver on promises and which create service issues that drive advisors away.

Limited Options: Going direct means you’re only considering one firm at a time. We present multiple options so you can compare and choose the best fit for your specific practice needs.

Time Savings: The research and due diligence process can take months. We’ve already done the work and can quickly identify firms that match your specific requirements based on our extensive expertise.

Risk Mitigation: Making the wrong choice can be costly and disruptive. Our 35+ years of experience and ongoing advisor feedback helps you avoid firms that may look good on paper but will only create problems in the future.

Many advisors tell us: “My only wish is that I found you sooner in the process!” as they didn’t know consultants like us existed and struggled through the search process alone.

Moving client accounts is typically handled through the ACAT (Automated Customer Account Transfer Service) system, but the process requires careful planning:

*This process varies depending on the type of firm an advisor is leaving and any contractual limitations.

Pre-Move Preparation

• Compile complete client account information and documentation
• Identify any complex assets that may require special handling
• Prepare new account applications for each client
• Develop client communication strategy and materials

Client Communication Process

• Send initial notification letters explaining the move and its benefits
• Schedule individual meetings with key clients to address concerns
• Provide clear timelines and expectations for the transfer process
• Offer direct contact information for questions during transition

Account Transfer Mechanics

• Submit ACAT instructions for each client account
• Monitor transfer progress and resolve any rejection issues
• Handle non-ACAT eligible assets through alternative methods
• Coordinate timing to minimize client service disruptions

Choosing the right independent broker-dealer requires evaluating multiple factors specific to your practice and goals:

Business Model Alignment

• Commission vs. fee-based business focus and capabilities
• Product offerings that match your client needs and investment philosophy
• RIA support if you want hybrid capabilities or plan to transition to fees
• Clearing platform and custodial relationships that serve your clients well

Technology Platform Evaluation

• Customer relationship management (CRM) system quality and integration
• Portfolio management and reporting capabilities
• Financial planning software options and sophistication
• Client portal functionality and mobile app quality
• Trading platform efficiency and order management tools

Support Services Assessment

• Back-office operations quality and responsiveness
• Compliance support level and philosophy
• Marketing materials and co-op advertising programs
• Practice management consulting and business development resources
• Transition assistance and ongoing advisor support

Financial Structure Analysis

• Payout evaluation
• Fee structures, expenses, platform/admin fees and any hidden costs
• Upfront transition assistance amount and terms
• Long-term compensation potential and growth opportunities

Culture and Management Philosophy

• Senior management accessibility and communication style
• Ownership structure
• Advisor treatment and relationship approach
• Growth orientation vs. maintenance focus
• Decision-making processes and advisor input opportunities
• Short term and long term goals or plans to sell

Regulatory and Compliance Considerations

• Compliance track record and examination history
• Supervision approach and oversight philosophy
• Product approval processes and restrictions
• Support provided during regulatory examinations

Due Diligence Questions to Ask

• What’s your advisor retention rate, and why do advisors leave?
• How do you handle technology upgrades and platform improvements?
• What’s your approach to new product approval and platform additions?
• How accessible is senior management for advisor concerns?
• What support do you provide for practice growth and development?

Cross-Search’s 35+ years of experience with all major independent broker dealers and RIAs allows us to provide detailed insights into each of these areas and help you identify the 3-5 firms that best match your specific requirements.

Understanding the key differences helps you choose the right business model for your practice:

Regulatory Structure

• Broker-Dealers: Regulated by FINRA
• RIAs: Regulated by SEC or state regulators, subject to fiduciary standards

*most broker dealers also have an RIA and can process commission and fee business

Compensation Model

• Broker-Dealers: Transaction based commissions, most broker dealers offer fee-based options through their RIA
• RIAs: Fee-based model, advisors typically charge a fee of assets under management

Investment Product Offerings

• Broker-Dealers: Full range including commissioned products like annuities, alternative investments, insurance, MFs etc.
• RIAs: Typically limited to fee-based investments, no commissioned products allowed

Custody Arrangements

• Broker-Dealers: Self-clearing or use affiliated clearing firms like NFS (Fidelity), Pershing (Bank Of New York), Raymond James etc. for account custody
• RIAs: Must use third-party custodians like Schwab, Fidelity, Pershing etc.

Hybrid Options Many advisors choose to run their RIA for fee based business while also affiliating with a broker dealer for commissions or trail business.

When evaluating potential broker dealers, these critical questions will help you make an informed decision:

Technology and Platform Questions

• What CRM, portfolio management, and financial planning tools do you provide?
• How does your technology systems integrate with each other?
• What are your plans for technology upgrades and improvements over the next 1-5 years?
• What mobile capabilities do you offer for both advisors and clients?
• How does your client portal compare to industry leaders?

Support Services Questions

• What specific back-office support do you provide for trade processing and client service?
• How does your compliance support work, and what’s included vs. extra cost?
• What marketing materials and co-op advertising programs are available?
• Do you provide practice management consulting or business development support?
• What is the transition process and how much support is offered through the process?

Financial Structure Questions

• What are the payouts for different business types (commissions, fees, insurance)? Some firms focus on a payout grid where others will negotiate with each individual advisor.
• Are there platform/admin fees applied to advisory business?  How does this flow through the grid?
• What ongoing fees and expenses should I expect, and what does it cover?
• Please provide a list of the advisor/client fees.  Many firms charge for many items advisors may not be expecting, for example, small account fees, audit fees etc.
• Do you offer upfront transition assistance, and what are the terms?
• How do payouts change based on production levels?

Business Model and Growth Questions

• How do you support both commission-based and fee-based business?
• What’s your philosophy on new product approval and how long does it take?
• How do you help advisors grow their practices and attract new clients?
• What training and development programs do you offer?
• Do you have restrictions on certain types of clients or investment strategies?

Culture and Management Questions

• How accessible is senior management to individual advisors?
• What’s your advisor retention rate, and what are the main reasons advisors leave?
• What is your current ownership structure and what are the plans for the future of the firm?
• What’s your long-term vision for the firm and the industry?
• How do advisors have input into firm decisions and platform changes?

Compliance and Regulatory Questions

• What’s your compliance examination history and any recent regulatory issues?
• How do you keep advisors informed about regulatory changes?
• What support do you provide during regulatory examinations?
• What’s your approach to supervision—hands-on or more flexible?
• How do you handle compliance violations or customer complaints?

References and Due Diligence

• Can you provide references?  Advisors should determine the type of referrals they would like to chat with.
• Can I speak with advisors who have similar practice sizes and client types?
• What advisor advisory groups or feedback mechanisms do you have?
• How do you measure and report advisor satisfaction?

Understanding compensation differences is crucial for making financial projections:

Independent Broker-Dealer Payouts

• Typically range from 80-95% depending on production level and firm
• Higher producers generally receive higher payout percentages
• Grid systems often reward production growth with increasing payouts
• May include upfront bonuses or transition assistance packages
• Different rates for different business types (commissions vs. fees vs. insurance)
• Advisors should also expect fixed costs that include technology, E&O insurance and ancillary fees that range between $4,000-$13,000 per year, per advisor.
• Advisors should also expect to be charged a platform/admin fee on their advisory business.  Can range from 1-25 bts on assets.  Calculated either on total assets under management or household size.

RIA Fee Structures

• Management fees typically range from 0.75% to 1.5% of assets under management
• Fee schedules often decrease at higher asset levels (breakpoints)
• Some RIAs charge flat fees, hourly rates, or retainer models

Expense Considerations Broker-Dealer Expenses:

• Ticket charges: $5-25 per trade
• Compliance, registration and miscellaneous: $100-300 per month
• Technology fees: $100-400 per month
• E&O insurance: $1,500 – $5,000 per year

RIA Expenses:

• Custodial fees: often passed through to clients
• Technology costs: $500-10,000 per month depending on the size of the group and technology needs
• Compliance consulting: $500-4,000 per month
• Insurance: $3,000-8,000 annually
• Marketing and business development: varies widely

While payout percentages are important, focusing solely on the highest percentage can be misleading:

High-Payout Considerations Many independent broker-dealers offer payouts in the 85-95% range, but it’s crucial to understand the complete picture:

It’s important to factor in all expenses to determine your net compensation

• Monthly fees
• Technology costs
• Admin/platform fees (can be more costly than the payout override in some cases)
• Ancillary client and advisor costs

Total Compensation Analysis The key is analyzing net income after all expenses, not just gross payout percentages:

Factors Equally, If Not More Important Than Payout Percentage

• Quality of technology platforms and integration
• Level of back-office and compliance support
• Marketing and business development resources
• Growth potential and advisor development programs
• Long-term firm stability and advisor retention