From the May 2007 issue of Boomer Market Advisor • Subscribe!

Royal Alliance Chief Executive Larry Roth -- We turbocharge the RIA's platform

The AIG Advisor Group has made a significant investment in recent years in the technology and service that its four broker/dealers offer their reps (Advantage Capital Corp., FSC Securities Corp., Royal Alliance Associates Inc. and AIG Financial Advisors). New York-based Royal Alliance has been no small part, and CEO Larry Roth took time to speak with Boomer Market Advisor about the company's effort, its effect on the reps and what it's doing for AIG's business overall.

Roth has more than 20 years of experience in the financial services industry, in everything from sales, banking and brokerage channels, management, and e-commerce distribution. He joined Royal Alliance in January 2006. Before that, he served as a managing director of Berkshire Capital Corp., a merger and acquisition advisor. In addition, Roth was CEO of the ING U.S. Retail Group and CEO of VESTAX Securities Corp., a broker/dealer he owned and eventually sold to ING.

Boomer Market Advisor: The fee-based model is the wave of the future. How is Royal Alliance, and AIG Advisors Group in general, helping reps make the transition?
Larry Roth:
AIG Advisor Group offers its reps a multifaceted advisory platform. We have a major initiative underway to help advisors convert to the fee-based business model, and right now there is $34 billion in assets within our fee platform. Central to the effort is Vision 20/20, a technology chassis we offer to our reps. It currently has $10 billion in assets.

BMA: We often ask broker/dealers if they have a "practice management" point person reps can contact if they have questions about running their business. Do you offer that type of a resource?
LR: We actually have 28 full-time consultants to help reps make the transition to fees. And they are not wholesalers; they act as true consultants to our reps. They're spread out all over the country to assist with any issues that might arise. We also have the Investment Advisory Services Group, which brings the reps in for training and will also visit them on-site to assist them if need be. The result of all this is that business has been growing rapidly, at a rate of about 25 percent per year. We started building this out with the release of Vision 20/20 in 2001, and really started staffing the platform in 2003. Since then, the growth has been tremendous.

BMA: How, specifically, does Vision 20/20 help reps to increase revenue and decrease costs?
LR: Pershing powers it, but it's our own proprietary system. There are three main points that make the rep more productive and increase revenue while decreasing costs. It allows for flexibility when producing quarterly performance reports, so the rep is able to present the data in a manner that's comfortable and unique for the individual client. It also allows for global rebalancing within client accounts in a number of different ways; for instance, by tax lot, by type of investment or by model portfolio. So as the client ages and different needs arise, the rebalancing can take place automatically. Lastly, reps can use our corporate RIA, or they can form their own RIA. Because the system is really a chassis, it can be integrated within an RIA's existing platform. So we're able to go after RIAs that are just starting out and partner with them to bring them along, or we can go into existing, successful RIAs and plug in to what they are already doing. They don't have to change what it is that has made them successful in order to work with us. We're able to go in and really turbocharge the RIA's platform.

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