Should You Be Thinking about Your Clearing Platform?

Constantly changing market factors, evolving regulations, and advancements in technology have resulted in competitive challenges that are causing forward-thinking firms to determine the appropriate process, technology, financial and strategic investments to stay ahead or even just keep up. In a rapidly changing environment, the analysis to decide if it’s best to invest in your current platform or consider a different path should not be ignored or pushed too far into the future. One of the most meaningful relationships any introducing broker-dealer has is with its clearing provider.

Is the grass really green enough to move, or does your own  lawn just need some attention?


Selecting a clearing firm goes beyond just looking at today’s business challenges to see what kind of expenses can be slashed or up-front check is available. Assessing your firm’s strategic plan and financials is the first step when considering whether to stay with your current clearing arrangement or seek a new partner. Once you determine where you want your firm to be in the next five, ten or fifteen years, other more tactical questions should be asked and answered:

  • Does your current clearing arrangement align with your mid- to long-range business plan?
  • Is your business understood by your current clearing partner? How well do they know you?  Are they a strategic partner or advisor?
  • Is your firm being supported well?  Is your clearing firm fully engaged?
  • Are there any technology gaps or functionality not being readily supported? Have you had to engage additional vendors on your own to find solutions?
  • Are their Servicing and Support models meeting your needs?
  • Are you effectively managing and prioritizing defects and enhancements with your clearing platform vendor?
  • Are their incentives in your current Clearing Agreement (a.k.a. Schedule A) that reward growth and share the gains?
  • Revenue sharing
  • Expense reduction
  • Basis point pricing
  • Mark-up/Mark-down client fee opportunities (pass-thru savings to clients)
  • Bundled vs. a la carte pricing  

Whether you are considering a change from self-clearing to fully-disclosed (or vice-versa), exploring your clearing options or just starting a broker-dealer, the assessment of your firm’s current state, setting your growth objectives and ensuring alignment are critical to your long-term success. Identify gaps, examine priorities, and requirements to enable a more objective analysis of potential clearing partners. Competitive intelligence, benchmarking, unbiased recommendations and best practices will help your firm make the best decision.

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About the Authors:

Pete Bowman has extensive executive and management experience advising on Brokerage Platform and Correspondent Clearing Alternatives. He began his career 35 years ago at Wheat, First Securities where he was a member of the “Management Fast Track Program”.  Pete worked in all facets of Brokerage Operations and took on various supervisory and management positions. Ultimately he was appointed Director of Operations of First Clearing, the clearing arm and subsidiary of Wachovia Securities (now Wells Fargo Advisors). Pete expanded his career by joining the Correspondent Clearing Services division of Wachovia Securities as a Segment Director, where he oversaw top tier client relationship management and assumed numerous roles in Product Development and Sales.  At Oyster, Pete created the Brokerage Clearing and Platform Advisory Services.

Pete McAteer has senior level management experience in coaching, consulting and leading large programs and operations teams; driving significant, impactful change management, process improvement and implementation efforts. He possesses a deep background with over 25 years of experience with Fortune 500 companies working in International Quality Manufacturing and Financial Services industries. Pete has spent the past 18 years in the financial services industry (brokerage and retail banking) in quality service delivery, program leadership, PMO governance and operations leadership roles. He has led complex organizational/operational integrations, change management and implementations, client service programs, regulatory responses/remediations and process improvement efforts. He has a proven track record of success serving as executive management consultant, Program Manager and PMO lead. Pete is especially skilled at building strong trusting relationships across all levels and functions across organizations.