From the September 2007 issue of Investment Advisor • Subscribe!

September 1, 2007

A Great Business to Be In

Why independent advisors, and their partners, are more savvy than their competitors

If there was an overriding theme voiced by the leaders of the 2007 Broker/Dealers of the Year in an editorial roundtable discussion in Chicago on August 7, it was, in the words of Chris Ranney of Brecek & Young, that this is a wonderful business to be in. The independent advice business has had a great 20-year run, noted Ranney, seconded by Nick Sondel (Harbour Investments), Eric Meyers (Capital Financial Group/H. Beck), and Eric Schwartz (Cambridge Investment Research), but it's poised for an even greater future, fueled by client demographics and more-complicated financial instruments and markets, but made possible by independent broker/dealer reps and independent RIAs who are more business savvy than ever.

The Investment Advisor mission statement could very well be "Savviness provider to independent advisors." That's why we present a cover story relaying the thoughts of those four gentlemen whose reps this year gave them the highest ratings among their peers in the 17th annual Broker/Dealer of the Year balloting.

That's why it was satisfying, though not surprising at all, to see The New York Times "chase" our Affluentialist columnist and blogger Lewis Schiff with its August 5 front-page story on the "working-class millionaires" of Silicon Valley (reporters and editors in the consumer press troll the trade press, like Investment Advisor, for story ideas all the time).

That's why it was edifying to read Mike Patton's August 12 blog on client reaction to the recent market volatility. "I called another client after the 387-point drop in the DJIA. This particular client is approaching retirement and I expected him to be a little concerned. To my surprise he wasn't. In fact, he said, 'I trust you completely. Do whatever you think is best.'. . . These are the things that inspire me and are the reasons I do what I do. The common thread between each of these clients is that they didn't buy a portfolio or a financial plan, they bought advice." .

That's why I'm so pleased to have the hard-nosed, insightful writing of Kate McBride on the implications for advisors of the subprime mortgage crisis. You won't find that story here this month; it was in the August issue, since Kate was also ahead of the curve in her reporting.

I began this column, my 89th for Investment Advisor, by noting how the leaders of the 2007 Broker/Dealers of the Year agreed on the independent advice model's legs; I'll close with what I thought was an interesting behavior that occurred during that meeting. After a two-hour interview and as the hour-long photo session drew to a close, these four busy men could be heard gabbing away with each other in the dim light of the photo shoot room on everything from how they run their compliance departments to where and how they hold their annual conventions. They were sharing their business "secrets," along with their missteps, with peers against whom they often compete. It was such a telling microcosm of this business--I've seen it happen among individual advisors so often--that I had to smile. It's part of what makes independent advisors, and their partners, not only so admirable, but also more savvy than their competitors.

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