10 Questions to Ask Your Broker If You Are a Stock Plan Professional

Lori Drenkhahn Banner

Selecting the right broker for your stock plan is a key element to completing the equity compensation circle. You have taken time to design a successful plan, determine which types of awards will be most effective, educate participants on the value of their awards and communicate timely events – you don’t want to fall short on choosing the right broker partnership.

Be sure to consider all of your options.  There are a number of qualified brokers in the market ranging from full service to discount brokers – and even stock plan brokerage teams specializing in employee equity compensation plans.  Request a demo (or two), invite other members of your team to join and engage in the experience as if you are a plan participant. This will help you anticipate any problems your participants might have with the process.

Keep in mind, different levels of employees will have different needs and desires when it comes to brokers.  Consider an equity compensation management platform that allows you that freedom to use more than one. Giving participants the option to choose can help align each participant with the right type of service, creating a greater sense of value in the awards.

There are a few questions you can ask to gain a better understanding of the vendors offerings.  Whether you are looking for a broker for a brand new plan, evaluating a new broker for an existing plan or looking to assess the level of service with your current broker, when deciding what broker partnership is the right one for your company make sure you ask the following questions:

  1. How many team members will be dedicated to your account?
  2. What is the size and hours of the call center and what level of expertise do the different levels of call center support possess?
  3. How can the broker help you educate your participants with best practices via written resources or live presentations and can the education be targeted specifically to the demographic and education level of my employees?
  4. What types of fees are associated with transactions – commissions, other extra fees?
  5. What transaction modeling, reporting and self-service is available?
  6. Who supports the technical aspects of the website hosting the participant portal?
  7. When will Option Cost and/or taxes be received and how many wires – one per transaction, one per day?
  8. How will the broker handle the Transfer Agent requests?
  9. When will vested Restricted Stock Unit (RSU) / Restricted Stock Award (RSA) shares be available for sale?
  10. How can the broker support my executive level population? (Ownership rules, 10b5-1 etc.)

Evaluating brokers can be time consuming, and while it may seem easy to simply “pick one”, this method can have a negative effect on participant satisfaction and ultimately the success of your equity plan.

When choosing a broker to execute your employee stock plan, consider the different levels of employees that participate in the plan, what type of broker best fits your participant needs and what level of support you will need for your employees.

The final experience your employees will have with their equity awards is interaction with the broker and you want to ensure you choose the best fit for a seamless experience. Contact us to find our more about Certent’s open eco-system of broker partners.