30 May 2023
Truth? Can you expand your business model while under a Series 79 sponsorship? The short answer is, “Oh, yes.” While regulatory compliance information is at the forefront of every sponsoring firm, the opportunities to expand your business model exponentially while under the sponsoring firm are just waiting to be realized at the same time. There’s a catch, of course. In addition to the full support and extensive knowledge that your sponsoring firm must bring to meet your needs, a process-driven, results-producing sponsor must be dedicated to your growth beyond the more mundane boundaries of sponsorship. Examine this construct for series 79 sponsorship to form a solid understanding of sponsorship. And, if your next question is, “How can I find such a sponsor?” Read on. It’s time to expand your business.
The initial element in recognizing a Series 79 exam sponsorship with potential to build growth in your firm is found in the spectrum of services offered. Does the sponsoring compliance team engage in the management of complex transactions? If so, this is a bell-weather of sorts, in that it indicates multi-phasic or complicated structured business deals within the finance industry. Further, does the sponsoring firm offer a steady stream of deal referrals to your broker-dealer firm? This is an indicator of strength and experience in diverse services, which can lead to an increase in the database of potential clients, along with a subsequent expansion of business for your firm.
Additional elements to consider when choosing a Series 79 exam sponsoring firm include the diverse relationships found within adjunct services offered. Such services may include those for financial and investment advisors, private equity sources, venture capitalists and more. What does this mean for your firm? In addition to gaining experience while observing such interactions, you’ll also be introduced to and will engage with the foundational stakeholders of each entity. The recommendations of your compliance team, based on knowledge and experience found within the sponsoring firm, will inevitably lead to a broad-based increase in your own knowledge, additional exposure for your firm and a growing client base as a primary outcome.
Other elements to weigh when choosing a sponsoring firm include the forms, resources and records that are sourced in the library of the sponsor. Bona fides should include FINRA, SEC, and state securities licensing, compliance and regulation. Will the sponsoring firm have a business structure that includes an interactive broker dealer platform with easy-to-access and use features? The best-in-class equipment and digital tools available should be able to produce large swaths of material for your exam due diligence. Such digital and hard copy resources will be invaluable to your firm during the sponsorship.
Security is always a question mark to be discussed when reviewing high-level securities transactions, mergers and acquisitions or other sensitive investment deals. Does the sponsoring firm have protection on pertinent levels or is the information guarded on a as-is basis? To gain the confidence of primary parties in any deals, the firm must have appropriate, flexible and squarely-focused systems in place.
Determine whether or not the sponsor under review can offer the services your firm needs. Will the compliance team meet with you regularly, offering support, oversight and industry advice? The Series 79 exam is exacting in nature and requires extensive knowledge from the applicant. The role of the compliance team will be to fully prepare the applicant. Does your potential sponsor have such a team?
A final element to examine while seeking the services of a Series 79 sponsor is found in understanding that several of the above elements of a sponsorship are not typically present, outside of the top performers of the finance industry. FINRA requirements are strict for those firms taking on the responsibility of sponsorship; however, not all sponsors are alike. And, in this regard, you’ll want to fully determine through your own research which sponsor will be the best fit for your firm during the Series 79 sponsorship.
Choosing a Series 79 sponsor and engaging in a meaningful relationship to pass the exam is of vital importance. However, the addition of growth possibilities and the structuring of an enlarged business model spells a success for not only you as an individual, but offers your firm a leap into an evolutionary process of learning, experiencing, engaging with and growth in relationships with other financial industry leaders. This type of learning and exposure is rare and to be highly-prized.
By Maciej Korzeniowski on 30 May 2023
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