Over the past two decades, independent financial advisors have witnessed the strength in numbers that comes from working together under the Super-OSJ (Office of Supervisory Jurisdiction) structure. In addition to providing independent advisors with compliance support, Super-OSJs enable advisors to pool resources, leverage their respective strengths and share best practices. Equally important, these structures allow advisors to benefit from working together while maintaining the independence of their own practices.
Discussing the Super-OSJ model, Keith Kelly, Executive Vice President & COO of FSI, said, “Financial advisors throughout the nation are interested in going independent, but not necessarily in doing so alone. Super-OSJs fill this gap. As a result, the largest and most successful of these organizations have built enduring brands and evolved into critical players in the independent brokerdealer space.”
One leading example of a successful Super-OSJ also happens to be one of the first of its kind: The Financial Services Network (FSN), formed in 1984 and based in San Mateo, California. Today, this Super-OSJ supports 200 independent advisor practices across 17 states and the District of Columbia, with total advisor assets under management of approximately $8 billion.
Founder and Chairman Jim Herrington notes that the basic idea behind FSN — creating a group of advisors who could share best practices and help each other grow — still drives the network today. “Advisors join a community when they are with us,” says Herrington. “We made this a focus from our first day in business, and even now, with as many offices as we have, it’s all about building a community of advisors who are willing to share their expertise with one another.”
Of course, FSN’s capabilities and service offerings have grown in accordance with the evolution of the industry. Herrington sees his organization’s value proposition for advisors today as falling into three basic areas:
1. Helping advisors grow their businesses. FSN’s ongoing focus on this central part of its mission takes several forms, including: helping advisor members improve their marketing plans and sharpen their focus on niche markets; coaching and mentoring on sales and management issues, as well as identifying potential operating efficiencies; connecting members seeking expertise in certain areas with other members who have experience in those sectors; and facilitating acquisitions.
2. Operational support and service. FSN employs 12 full-time employees, whose primary focus is to make advisors’ jobs easier. FSN provides complete compliance support to its advisor members, and handles a wide range of business processing and operations functions for their offices. As Herrington puts it, “We work very hard to take off the desk of advisors things they might otherwise have to do if they were a standalone OSJ: compliance, tracking, processing and other tasks.” This focus on operational support extends to the technology side of advisors’ businesses as well. As Herrington says, “We embrace new technology, and provide a lot of technology support to our members. We’re based in the middle of Silicon Valley, so that comes naturally to us.”
3. Troubleshooting with third parties. Herrington describes this aspect of FSN’s value proposition very succinctly: “We act as a general ‘problem resolution’ office for our members,” he says. “This can mean that we assist with issues that they may have with any outside third party, including product suppliers, other vendors, or even with their own clients.”
“We consider ourselves a partner of the broker-dealers; they see us as an extension of their value proposition. In addition to the daily supervision and processing that we do for over 200 members, we conduct all of the field audits. We’re in 17 states, so the time that we save broker-dealers on audits alone is substantial. It’s a win for the advisors; it’s a win for our organization; and we think it’s a win for the broker-dealer as well. And that’s the best kind of partnership.”
Herrington and FSN are also staunch proponents of FSI.
On his longstanding support for FSI and its advocacy priorities, Herrington says, “By informing our members of what’s happening in the legislative and regulatory arenas, FSI provides a tremendous amount of value for us. We feel strongly that it’s important for us to provide our advisors with venues through which they can express themselves on the issues that impact them, and FSI — through their Calls to Action and other initiatives — helps us do that. What they are doing is the best way to serve this industry — that’s why I’ve been a member since 2005.