Ask Brad: Why Don’t Broker/Dealers Make Their Advisors Happier?

This is the latest installment of a regular column to answer questions from advisors who are considering transitioning to an RIA model. To see Brad’s previous articles, click here. To submit your question, please email Brad here.

Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.

I have a suggestion.

I am not optimistic this change will ever occur, but it’s worth asking why not.

I hear a lot of brokers explain why they are unsatisfied with their current firm or affiliation model.

A common theme is frustration with the constraints of their compliance department. (I previously wrote about how you can fire your compliance department.)

I often point out that a challenging compliance department is usually not a firm-specific but a structural problem.

Imagine being the chief compliance officer at a broker/dealer with 10,000+ representatives. Your job security and future career advancement are based on your ability to limit risks for the firm. You’ll be first in line for the bureaucratic firing squad if things go bad.