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Choice Overload? 4 Key Criteria for Evaluating Service and Platform Providers

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4 Key Criteria for Evaluating Service and Platform Providers

With so many options now available for freedom-seeking advisors in the $50 to $150 million range, it can be difficult to choose the right service and platform providers for your leap.

In a previous article, With Demand Comes Supply, Deborah Aronson discussed how service and platform providers have evolved to serve the needs of a growing population of prospective breakaways in the $50 to $150mm range—and advisors in this constituency who are seeking independence now have plenty of options to choose from.

Yet with optionality often comes “choice overload”—that is, with all the available options, many advisors get stuck when attempting to discern one provider from another.

The reality is that services like compliance, operations and technology are all table stakes at this point, no longer serving as benchmarks in the decision-making process. With that being the case, what key criteria should an advisor rely upon to make their decision? We’ve identified 4 areas to focus on during this evaluation process.

Culture – The ideals and vision of a firm are vital components in shaping its culture. As culture is often a key differentiator amongst firms, many advisors choose their service or platform provider based on how closely it represents their own ideals and vision. For example, even though you are going independent, you may still be looking for a firm that has a community of like-minded advisors who share similar values and goals for their ongoing business.

Pricing – When it comes to comparing costs associated with service providers, it often feels like comparing apples to oranges. Some may be a la carte, while others may be all-encompassing—including Errors and Omissions (E&O) insurance (which protects an independent firm against claims of wrongdoings), technology and even office space. That said, it is helpful to know the bottom-line number for all the firms you are evaluating, so putting together a pro forma for each (or asking a firm for their guidance) will enable you to better analyze your overall net take-home.

Related: Freedom From the Big Brand: Unencumbered Growth for an $800mm Team

Strategy – While it’s important to understand each service provider’s strategic vision for the firm – both in the near- and long-term – you need to understand how it aligns with your own vision. Are they focused on growth and increasing the number of advisors they bring on, or is their intent to stay smaller and more selective? What is their end game? Are they looking to sell down the road? How the firm envisions their own growth and future can directly impact your business, so be clear in understanding their plans.

Trust your gut – This is always most important. With so many service providers on the Street offering similar service and support, sometimes it simply comes down to trusting your instincts. You may just feel more comfortable with or gravitate towards one in particular, even if you can’t put your finger on the exact reasons why.

In this ever-evolving industry landscape, we’re seeing more and more platform and service providers enter the marketplace, giving advisors who are considering independence an abundance of choice—which can certainly be overwhelming. Thus, it is extremely important to get educated on your options and be clear on your own goals. Then focus on these 4 key areas to help identify those providers that will make the best fit for the future of your business.

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