Ep 083: Switching To The Right Independent Broker-Dealer By Understanding Its Profit Centers With Jon Henschen
Financial Advisor Success
Michael Kitces
4.8 • 696 Ratings
🗓️ 31 July 2018
⏱️ 98 minutes
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Summary
My guest on today’s podcast shares my philosophy that the industry could use a little more transparency when it comes to broker-dealers, and he is working to make that happen. Jon Henschen is the president of Henschen & Associates, a recruiting firm that specializes in helping advisors find and match themselves to the right independent broker-dealer when making the switch to a new platform. In a segment of the industry that historically has thrived by keeping much of its compensation hidden with back-end commissions and markups, Jon’s willingness to be transparent is refreshing, to say the least.
In this episode, he talks in depth about what advisors should know about the broker-dealer landscape these days. Listen in to learn how the independent broker-dealer recruiting model works, the differences in dynamic between larger and smaller firms, and what advisors need to know in order to pick the right broker-dealer for them.
For show notes and more visit: https://www.kitces.com/83
Transcript
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| 0:00.0 | Welcome to the Financial Advisor Success Podcast, where you go behind the scenes with financial planner, speaker and consultant Michael Kitsas, to hear stories of how leading financial advisors navigated the inevitable challenges that arise on the path to success and get insight from leading industry consultants about how to break through to the |
| 0:22.0 | next level in your advisory business. And now here's your host, Michael Kitsis. Welcome, everyone. |
| 0:28.5 | Welcome to the 83rd episode of the Financial Advisor Success Podcast. My guest on today's podcast is |
| 0:34.3 | John Henshin. John is the president of Henshin and Associates, a recruiting firm that |
| 0:38.9 | specializes in helping advisors find and match themselves to the right independent broker-dealer |
| 0:43.1 | when making a switch to a new platform. What's unique about John, though, is his willingness to be |
| 0:48.3 | transparent and how broker-dealer recruiting really works in a segment of the industry that historically |
| 0:53.4 | has thrived by keeping |
| 0:54.5 | much of its compensation hidden with back-end commissions and markups. In this episode, we talk in |
| 0:59.9 | depth about the key factors to consider when evaluating a prospective independent broker-dealer. |
| 1:05.1 | Why the ownership structure and whether the BD is publicly owned or privately owned or |
| 1:10.3 | whether the private owner is an individual or privately owned or whether the private owner is an |
| 1:11.4 | individual or a bank or an insurance company or a private equity firm is so important. |
| 1:16.3 | The ways that certain broker dealers specialize in certain types of reps, how forgivable loans work |
| 1:21.5 | when advisors are recruited to a new independent broker dealer, and the ways that broker dealers |
| 1:25.3 | have created profit centers above and beyond the payout grid, which is crucial for advisors to know so they don't unwittingly switch to a broker |
| 1:32.2 | dealer that may drive higher pass-through costs to their clients. We also talk about how the independent |
| 1:37.4 | broker-dealer recruiting model itself works, how recruiters are paid by broker-dealer's to find new |
| 1:42.3 | advisors to switch to them, what broker-dealers really spend upfront in order to attract advisors to make the switch, |
| 1:48.2 | and how the dynamics differ when being recruited to a larger versus smaller independent broker |
| 1:52.3 | dealer. And be certain to listen to the end, where John talks about the trends in independent |
| 1:57.0 | broker dealers that advisors should know when considering where to build their businesses |
... |
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