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Advice for OSJs: Best Practices for Leading, Guiding, Mentoring, and Informing
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Author: Dennis Kelleher
When I look back on some of the big mistakes I’ve made in my life, I realize that more than a few could have been avoided had I done one thing—istened to family and friends who had been there before and who were willing to share their knowledge and the benefit of their experience with me.
As an OSJ supervisory principal, you have everything it takes to be the kind of mentor I wish I had listened to throughout my life. You have knowledge, and you’ve been granted a position of responsibility not just because you hold the Series 24 securities license but also because you have industry experience. In addition, you have a clean disciplinary record and the expertise that others may benefit from.
While your duties as an OSJ are of a supervisory nature, you are also asked by Commonwealth to teach, to set an example, and to be a leader. By acting as a leader and sharing your knowledge, you add value to your organization and to Commonwealth in the eyes of regulators.
To help you in performing your various roles, I’d like to recommend a few best practices that some of our most effective OSJs follow in fulfilling their responsibilities.
WORK CLOSELY WITH JUNIOR ADVISORS
In most cases, you supervise advisors who have less industry experience than you; in fact, in some cases, you may be overseeing advisors who have no industry experience at all. In addition to the day-to-day activities of reviewing and approving transactions, correspondence, and account documentation, you can guide and train by:
- Allowing those whom you supervise to sit in on client meetings. Even if you don’t share clients, an inexperienced advisor could benefit greatly by doing this. After those meetings, offer a debriefing session with the advisor and encourage him or her to ask questions. What may seem like common sense to you may be a lesson learned to someone new to the business.
- Holding regularly scheduled meetings with the advisors you supervise. The less experienced an advisor is, the more you may want to meet with that individual.
- Being informed about and familiar with Commonwealth’s policies and procedures, as well as industry rules.
TAKE ADVANTAGE OF AVAILABLE RESOURCES
In addition to your experience, the advisors you supervise can benefit greatly from the many resources available from other sources. Remind them often that:
- Commonwealth provides educational or training resources for advisors in the form of teleconferences, online education modules, and conference presentations.
- FINRA offers several online e-learning courses, as well as webinars and podcasts specifically for industry professionals. You can access these tools by clicking on Industry Professionals > Education on www.finra.org.
- Commonwealth has contracted with RegEd to provide online modules for fulfilling Firm Element Continuing Education credit. There are no limits to the number of RegEd modules advisors may take, and you may want to recommend specific topics for particular advisors.
- They should take advantage of wholesaler offerings. Product knowledge is just as important, if not more important, than understanding industry rules and regulations.
BE FAMILIAR WITH THE BUSINESS OF THE ADVISORS YOU SUPERVISE
Get familiar with the business and practices of the advisors you supervise. That way you are more likely to notice red flags that could signal trouble or the potential for trouble. For instance:
- Is an advisor shifting his or her practice in favor of products that pay higher commissions?
- Is an advisor living a lifestyle inconsistent with his or her income?
- Do your advisors have a few clients who account for a major portion of their production?
These are all questions that you as a supervisor should consider when reviewing business. At your request, the Compliance department will investigate an advisor’s credit report if you have reason to believe that he or she may be delinquent meeting financial obligations. Remember, as OSJ, you are a key supervisory arm of Commonwealth’s Compliance department.
STICK TO YOUR GUNS—OTHERS WILL FOLLOW SUIT
As OSJ, you are responsible for the actions of the individuals under your supervision. Part of being a good leader is having the discipline to stick to your guns.
- Don’t hesitate to discipline advisors who violate firm procedures.
- Get the Compliance team involved in supporting your position if necessary. We are always willing to issue Letters of Caution upon the request of an OSJ.
- It can be very helpful to have clear, written procedures in place. As OSJ, you have the authority to heighten requirements set forth by Commonwealth.
By being an active leader, you are helping your advisors grow; this in turn strengthens your practice and helps Commonwealth avoid customer grievances.
Dennis Kelleher is the manager of compliance in San Diego. He is available at x9740 or at dkelleher@commonwealth.com.
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