The Business Case for Evaluating your Clearing Partner

The economic impact to retail broker-dealers of their clearing strategy is larger than ever. Whether deciding between self clearing vs. fully-disclosed, or choosing the best provider when the answer is obvious, a thoughtful analysis and due diligence must be conducted to achieve your best results.  Much is riding on this decision in order to protect your firm and your clients, and to help you address the challenges facing your firm today and on the horizon.

The Case for a Look Under the Hood

Some firms balk at the cost and time commitment of performing an internal review of their current clearing contract(s) and key platform vendors; however, clearing costs are usually some of a firm’s larger expense items.  An operational, technical and financial analysis should be performed to help you understand and document the business challenges facing your firm, and to ensure you are realizing the optimum value from your clearing partner by having a clearing platform that complements and enhances your firm’s growth and development.

  • Is your current clearing partner engaged and aligned with helping you address these challenges?
  • Have you leveraged all of the capabilities in your current clearing arrangement?
  • Are you current with their offerings?
  • Are you spending money developing similar functionality or buying from alternate vendors?
  • Is your arrangement synchronized with and supporting your growth plan?
  • Examine your firm’s P&L along with your business needs to identify improvement opportunities

Once you have completed the analysis and due diligence around your current clearing arrangement, it will be easier to determine your next steps –

  • Does it make sense to stay with your current partner?
  • Should changes be made to your contract?
  • Or, should you start shopping for a new clearing partner better suited for your current and future business needs?

It’s always a healthy exercise to keep pace with clearing firm offerings, so every 5 to 7 years, it’s a good idea to take a good look around.

Oyster helps introducing firms realize greater value from their current clearing partners and can assist self-clearing firms in determining how to address technology challenges including mobility, CRMs, advisory tools, data management, cybersecurity and more. We work as an advisor to your executive leadership team. Our experience will help you find the optimum clearing model and/or service provider(s) best suited for your firm while ensuring alignment with strategy, growth objectives, service levels and budget. Our consultants are seasoned experts who have been on both sides when it comes to clearing decisions, and can provide you with efficient, effective results.

Learn more

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.