By James Morris, Questar Branch Office Designated Supervisory Principal at Ann Arbor Annuity Exchange
“Oh the times they are a-changin’” to quote Robert Zimmerman, better known as Bob Dylan. Once upon a time it was thought that financial professionals (FPs) needed to have a separate brick-and-mortar office to conduct business. FPs also needed an assistant, a receptionist, and someone to maintain the office files along with other processing responsibilities. As technology has improved our lives in countless ways, the evolution of the FP has followed suit. Nowadays many successful FPs do not have a separate brick-and-mortar office. Instead, they are working from home and meeting with clients wherever the clients find it convenient.
Some captive broker/dealers require their FPs to work from the broker/dealer’s local office. This is a great benefit for FPs that are new in their career and need a professional place to meet customers. However, experienced producers that have grown their practice and moved to an independent broker/dealer may no longer need to host their clients at an office and can provide a more personal experience by meeting with their clients at the clients’ preferred locations. Similarly, other FPs may choose to work with a group of FPs in an office of supervisory jurisdiction (OSJ) location and share an office.
As you likely know, there is a cost to having access to an office in a captive or OSJ environment. The cost can be a lower securities payout or the limitations associated with working in a group environment. Often, FPs can increase their securities payout substantially by going independent and working from their home office. In other scenarios, the increase in revenue can allow the FP to rent a suitable office space and still come out ahead financially when compared to operating within a group.
As an FP, you may have questions concerning the logistics of maintaining a home office and complying with various broker/dealer and industry regulations. Fortunately, many broker/dealers realize that working from home is one of the benefits of choosing a career as an FP.
A few general guidelines include maintaining customer files in a lockable filing cabinet that only the FP has access to, as well as maintaining a lockable office area. The office typically also requires proper signage such as a broker/dealer sign and a SIPC sign. These signs can be placed in the office in an easily visible location, not necessarily on your front door, so your significant other doesn’t have to worry about altering your home’s curb appeal.
If you have a fax machine or receive securities-related correspondence, you must be the only individual with access to receive this information and have appropriate mail gathering procedures. Please note this is not an all-inclusive list of requirements, but rather a general overview as broker/dealer requirements vary.
Many FPs now have the ability to operate their practice with a smartphone and a laptop or tablet from any location they choose, provided data security and privacy measures are taken, via the web-based applications broker/dealers offer that can be accessed any time. For many FPs, maintaining an office isn’t practical for a number of reasons and also doesn’t make financial sense.
If you are a registered representative it is important to know what your broker/dealer will and will not allow. If you would like to further explore the benefits and considerations of working from home, please give me a call. 800.321.3924
James Morris | Designated Supervisory Principal
Questar Capital Corporation Branch Office at AAAE
Ph: 800.321.3924 x159 | Dir: 734.786.6159
Securities offered through Questar Capital Corporation (QCC). Member FINRA/SIPC. Advisory services offered through Questar Asset Management, a registered investment advisor. Ann Arbor Annuity Exchange is an affiliate of QCC.
Designed for Financial Professionals.