Let’s consider the following scenario. You have been a representative with your broker-dealer for the past 15 years, and when you look back on the time spent with them you have nothing but great things to say. The company has always tried to stay ahead of the curve; service levels have increased over time; the back office staff has always been friendly and responsive. The next thing you know, you see your broker-dealer show up in the headlines, and not in a positive way. Naturally, you start to wonder: Is this a hiccup? Will they get right back on their feet again tomorrow? Or will this news somehow impact them for the long term and possibly affect your business relationship?

We see these kinds of headlines often. A firm is rumored to be for sale. A company is laying people off after a sluggish quarter. A broker-dealer is cutting payouts as their projected net income shrinks. A firm is being fined by FINRA or a specific state for supervision issues. What happens next can almost be set on your watch: Your phone starts ringing and people start asking if you like your broker-dealer, and suggesting just how quickly you should bail out of your sinking ship.

We offer two pieces of advice if you face a situation like this. First, call your broker-dealer directly and open the lines of communication with its senior managers to discuss your concerns. Find out if the people that you have worked with for the past 15 years can offer insight into the situation, and perhaps give you a better explanation than what you have read. See if your fears and concerns can be allayed and your questions answered so that you know “the ship hasn’t hit an iceberg.” Second, if you contemplate making a broker-dealer change due to some negative news, consult with trusted industry colleagues for their knowledge and points of view, including representatives at your current broker-dealer, representatives at other broker-dealers, and local wholesalers/key account executives at product companies affiliated with your broker-dealer. The best advice, and often the most accurate news, usually comes from trusted colleagues.

Have you thought about this? We have….

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