Which broker/dealers are getting it right? Which broker/dealers go above and beyond in serving the needs of both their reps and their reps' clients? We asked our readers, and after our own due diligence, are proud to announce this year's Broker/Dealer Excellence Award winners - Raymond James, Investment Centers of America, Summit Brokerage Services and Advisory Group Equity Services.
Richard (Dick) Averitt, CEO
Large Independent Broker/Dealer
Fast Facts >>
Who: Raymond James Financial Services
Where: St. Petersburg, Fla.
Years in business: 35
Number of producers: 3,269
Total assets managed by producers: $118 billion
Avg. gross per producer: $270,000
Min. production level required: $250,000
Clearing firm: Raymond James & Associates, Inc.
Parent corp.: Raymond James Financial, Inc.
If you read tea leaves, the following anecdote from Raymond James Financial Services CEO Richard (Dick) Averitt is a sure sign.
"Our annual conference happened to end on March 9. Our advisors were suffering from compassion fatigue, but all were surprisingly resilient about the future. It's a unique opportunity for our advisors to build their business, and they understand that. The motto we constantly repeat is, "It's a chance for us to do what we perceive is right. If we're lucky, we will do it right. If we're luckier still, we'll do it at the right time.'"
Of course, March 9 was the market low, so talk about the right time. Since then, things have been pretty good for the St. Petersburg, Fla.-based broker/dealer (despite the Buccaneers' performance in the stadium that bears its name). A market rebound, and--if we may be so humble--the second year they've received a Broker/Dealer Excellence Award in the large independent category, as named by our readers.
So what's the secret? Consistency.
"If I'm repeating my comments from last year, I apologize [he is, but it fits with the narrative]. We've always been a bit old-fashioned. We felt that if someone wanted mortgage financing for a house, they should have a job. We never got caught up in the subprime nonsense. We also stay out of our advisors' way. There are of course regulatory and compliance requirements that must be strictly adhered to, but we do all we can to make it easy for them to do business. We don't leverage the company, and although revenues are off, surprisingly our assets under management are only down slightly.
So what, exactly, did he say to his advisors at a time when it looked like hope was lost?
"I got up and told them, 'You're not at fault for what happened; this market was an outlier in the standard deviation. You're in a good place, a safe place. As a consequence, so too are your clients. The company is here to stay, we're not going anywhere.'"
A safe prediction, given the firm's stature and success in the broker/dealer industry. So we ask him for specifics.
"People (and this includes advisors) want to trust the market. They want it to be a V recovery, but fear it's a W recovery, and we're headed for another downturn. We believe it is neither, and more of a square root symbol. We went down so fast that we were destined to come back fast. But now it will level off, and most likely will stay that way for the near future."
Let's hope he's right. But in any case, given RJ's recent track record, we'll probably be able to ask him about it next year.
Greg Gunderson, CEO and President
Fast Facts >>
Who: Investment Centers of America
Where: Bismarck, N.D.
Years in business: 24
Number of producers: 332
Total assets managed by producers: $8.2 billion
Avg. gross per producer: $215,000
Min. production level required: N/A
Clearing firm: Pershing LLC.
Parent corp.: Jackson National Life
Bismarck, N.D. - not exactly a hub of financial activity, which suits Investment Centers of America reps just fine. They marshaled their numbers and voted ICA in as the best of the mid-size firms. The reason, says president and CEO Greg Gunderson just happens to coincide with the mission near and dear to that of our magazine.
"Our reps are really focusing in on life planning issues. They're really learning to shut up and listen. I've got 13 different relationships here at ICA - everything from mortgages to retirement to investments. The last thing I need is another product. What I need is someone who can help see me through it all, and get me comfortable with retirement and legacy planning issues. And that's what our reps do. They've embraced the life planning aspect."
Gunderson also credits a top-notch wealth management support team as another reason for the win.
"Our reps know and use the team's expertise. They help with life planning, income distribution planning, investment management, risk management and wealth transfer planning."
That's not to take away from the firm's other specialized areas of support. ICA houses a dedicated team to assist advisors with marketing themselves at each stage of their career, and this includes everything from something as simple as placing outgoing calls to providing dedicated support.
AdvisorPath, its practice management platform, is designed to help advisors increase revenues and productivity while reducing costs. The module-based AdvisorPath is designed in five parts to help advisors assess, plan, grow, manage, and protect their practices.
Other reasons to brag? Gunderson claims their transition team is trained to make it as seamless as possible with the absolute minimal interruption to the advisor's business.
And of course, there's the peer support. The firm stresses a family culture (still small enough to do that). ICA's top reps are always willing and able to take a call from an advisor in need of advice, whether it's talking about current market environments or a sales idea.
And we have to say we're impressed with the technology the firm offers. Redtail Technology, Albridge Solutions, NetExchange Pro--quality names all.
"When my father founded ICA in 1985, his vision was to foster an atmosphere of personal integrity, long-term relationships and strong values. Today, that vision forms the foundation of our company and sets ICA apart from other firms in the industry."
Marshall Leeds, Chairman, CEO and President
Fast Facts >>
Who: Summit Brokerage Services Inc.
Where: Boca Raton, Fla.
Years in business: 16
Number of producers: 300
Total assets managed by producers: $4.5 billion
Avg. gross per producer: N/A
Min. production level required: $150,000
Clearing firm: First Clearing LLC., Pershing LLC.
Parent corp.: Summit Financial Services Group, Inc
"Here's what's different; let's make it easy," Marshall Leeds, Summit's gregarious chairman, CEO and president, told us last year. "Everybody talks about culture. I ran a 700-person firm and realized that at that point you start losing contact with advisors. You just don't know the wives and children and the family. When we started Summit, we said we're not going to go with 1,000 advisors. We're going to pick and choose who we want."
Let's make it easy. Seems to be Leeds' stock phrase, business philosophy and informal value statement. Here's what he told us this year, when informed the firm won again in our boutique broker/dealer category:
"Here, let's make it easy. Right now 90 percent of our profits are spent on technology and service for our advisors. We plow it all back into the company."
Not to say Leeds thinks any of what his advisors do is easy, but the simplicity and efficiency they experience at Summit lets them do what they do best--business. It's one of the reasons the firm's growth from recruitment is up 35 percent in the past 12 months.
"We continue to do what we've always done, which is to put the customer first and the company second," he explains. "And by that I mean the advisor is our customer. We plan to cut off the advisors we bring on board at 500 and then focus on doing all we can to increase the revenue of our existing reps. As I said last year, we will never be a 1,000-plus advisor firm. It's just not us. We recently had an advisor with a very large amount of assets come to us. Prior to the transition he e-mailed me. The number 876 was in his e-mail signature. I didn't know what the number meant and asked someone who told me it was his rep number at his old firm. I immediately told him that around here, we use names, not numbers."
The advisors currently seeking out the firm are 70 percent independent and 30 percent from wirehouses, which Leeds believes to be a good mix. The average advisor relationship lasts 15 years (remember, that's the average), a testament to the solid due diligence the firm performs in ensuring the right fit. As he told us last year, the firm turns down 80 percent of the advisors that come looking for a new relationship. We said it was a velvet rope approach then; today we'll go with "like trying to get into the Vikings/Packers dust-up at Lambeau."
"The other firms are simply not servicing their advisors. We don't want to make that same mistake; one where we grow so fast that we forget how to service our existing partners."
William McCance, President
Fast Facts >>
Who: Advisory Group Equity Services, Ltd.
Where: Reading, Mass
Years in business: 25
Number of producers: 40
Total assets managed by producers: $600 million
Avg. gross per producer: 125,000
Min. production level required: $50,000
Clearing firm: Pershing LLC.
Parent corp.: TAG Group, Inc.
If you don't know much about Advisory Group Equity Services, don't feel bad - neither did we. They popped up on our radar only when their advisors waged a dedicated campaign on their behalf.
"We are a concierge independent broker/dealer," says William H. McCance, president of the Reading, Mass-based firm. "We want the same profitable structure as an LPL Financial or a Commonwealth Financial Network, but with an extremely hands-on relationship. We have a bottom-up approach, meaning our advisors tell us what they want on the platform."
A sentimental streak might explain the firm's recent success, and the loyalty it engenders in its advisors. McCance harkens back to a different era to tell the following story, one that seems especially at odds with the Wall Street of today.
"When I was young my grandfather took me to the floor of the New York Stock Exchange," he relates. "He told me it was a gentleman's business. You put the client first, the advisor second and the firm third. If you keep it in that order, you'll be profitable."
Which is the reason McCance found himself at a small firm like Advisory Group Equity Services. He did eventually leave to start out on his own, but returned to buy the firm when the opportunity arose. He prides himself on knowing just about everything about every one of his advisors, which allows him to work side-by-side with them in a true partnership. And he's not above introducing policies and procedures based on his, and their, personal experiences.
"I had a minor health scare recently. It got me thinking about the knock my family might get on their door. So we set up an 800-number that allows for the client to track down the advisor anywhere in the world in case of an emergency. Thankfully, we've only had it used twice. But once was when a client had their passport stolen on the Champs-Elysse in Paris. We had all the passport information on file and had made a copy so we were able to help expedite the process."
Again, concierge service. They're a Pershing-affiliated firm with a little less than $1 billion in assets under management. And they plan to cap-off at just 150 reps.
"That's a very specific number and it's there for a reason. You can't know anyone well after 150 people. I don't need to be a multi-millionaire. I want to provide for my family and be there for my reps. I live about five minutes from home, and my wife calls me to tell me dinner is on the table. My job is my hobby; they are one and the same."
Haven't heard much about them up until now, but bank on hearing more in the near future.