Creating an Epic Partnership with Your Broker

By Kelly LaReau. Developing a strong relationship with the right broker is an essential component for a public company’s equity compensation program. With so many to choose from, it can be difficult to make the right choice, but doing so can have a very large effect on the success of your plan. There are a few critical elements to creating and maintaining a solid broker partnership including: asking the right questions from the get-go, initiating a successful roll out of your new broker and leveraging their educational resources. Having a clear picture can impact the relationship you have with that firm – and more importantly keep your executives and participants happy.

Selecting the right broker can feel like a daunting task. With so many types of brokers and brokerage service models, where do you start? There are full service brokers who will have a fuller scope of services for investing and trading, but may come at a higher price. Or, you can opt for a discount broker with different levels of trading services. You may also need the support of a stock plan brokerage team who specialize in employee stock plans and are knowledgeable in more than just trading. Because of their specialized knowledge, these individuals can be a great resource for your participants.

Once you have narrowed the broker playing field, knowing what to ask will help you cut right to the chase. Of course you will want to know the basics such as experience and team size, but also be sure to ask some more A Handshake Between Business Peoplespecific equity questions. Do they help with participant education? Can they handle all of your settlement questions such as: When will option cost and taxes be received? Can vested RSU shares be sold the next day? You will also need to gather your options and decide whether your participants will be using the brokerage website portal or your equity administration system participant portal. If you plan to use the participant portal provided by the brokerage firm, be sure to get a comprehensive demo so you have a full picture of the participant experience. Also, clearly articulate how you need the broker to support the needs of your diverse participant base and ensure that the broker is a good cultural fit.

After you have made your decision, rolling out your new broker to participants can set the tone for the relationship going forward – and partnership is key. If your plan has any unusual elements, be sure your broker is aware to avoid any unforeseen service issues. Your broker should also be able to support you and your participants with ongoing equity plan education. From equity comp basics to trading guidance, a critical aspect to the success of an equity plan is making sure all of your participants have access to comprehensive educational resources. Through onsite or online training, your broker can provide these tools and enhance the participant experience.

Whether you are just starting a new plan and looking for a new broker partner or simply looking to change firms, be sure to take the above points into consideration. Brokerage firms can offer a full range of products and services, and it is important that you choose the right broker to fit the needs of your equity plan and your participants. The Certent Equity Management platform is a broker-neutral solution enabling you to choose from a variety of broker partners. What do you look for in a broker? Post your thoughts in the comment section below!