Brokers have always been a canny breed but in the past few years this canniness has had to evolve further to combine the investigatory skills of Sherlock Holmes with the predictive talents of Nostradamus.
We’ve seen firms struggling to cope with the economic climate. From packagers to networks and from lenders to broker firms, there has been a raft of consolidation and many companies have gone bust.
This emphasises the need for brokers to do their homework before aligning themselves with a supplier or partner.
Brokers should not be scared of the term due diligence as it’s a concept that must be grasped when looking at potential business relationships.
Many associate the term with the purchase of another business but aspects of it can be used when looking at the infrastructure and financial stability of a company.
When looking at partnerships firms should not be afraid to ask probing questions of potential partners, distributors or niche providers.
Firms have sometimes not had the time or resource to conduct checks, entered into alliances lightly and lived to regret it.
Checking references, regulatory status, financial structure, website content and Treating Customers Fairly implications are just a few elements to bear in mind.
For those simply introducing business on an ad hoc basis, doing background research on providers is wise. We’ve all heard horror stories that underline how vital it is to choose trustworthy partners.