From the October 2009 issue of Research Magazine • Subscribe!

October 1, 2009

Investors Capital Finding Momentum

Discussions with prospective advisors involve many FAs who have yearly sales and commissions of $250,000 and up.

Investors Capital executives and advisors say they are well positioned for growth, the main theme of the broker-dealer's 13th annual convention held in Boston in August.

About 550 of the firm's 700-plus registered representatives attended the gathering to hear keynote speaker Dennis Connor and other industry experts. They also networked, brainstormed and benefitted from a series of professional development workshops.

By cost cutting, the firm has been able to preserve and protect capital, says Investors Capital Corporation CEO and President Tim Murphy.

The firm's parent company, Investors Capital Holdings, posted net income of $0.05 million for its first fiscal quarter ended June 30, 2009, vs. a net loss of $0.27 million for the comparative quarter ended June 30, 2008.

"Through prudent, effective cost-cutting, we managed to generate a profit in a market where our total revenues declined over 18 percent, while continuing to provide our advisors with premier service," explains Murphy.

"The opportunity we see is in the recruiting of more high-quality advisors," says Murphy, "as other firms find themselves in trouble and in turmoil."

Its existing financial advisors are a good source of recruiting prospects. "Today, we are really focused on the quality of advisors that come on board, in terms of their clients, assets under management and revenue base," he says.

"We see opportunity that we've never seen before and expect to continue to see it for the next few years. We are engaged in aggressive marketing for recruiting so that we can get in front of prospects and advisors to tell our story," he explains.

This activity is going well beyond exploratory conversations with prospects, Murphy says. And such discussions involve many advisors who have yearly sales and commissions of $250,000 and up.

Murphy isn't alone in his positive outlook. Financial advisor Travis Hughes of El Paso, Texas, has been adding advisors to his practice and recently formed a partnership with former rival Anthony Morris.

"Today, we have 5,000 clients," says Hughes. As the work of FAs has become more complicated, there's been a growing need for advisors to form teams. "And now we're able to cover more ground and improve our economies of scale."

"It's been a domino effect," shares Morris. "The more we grow, the more independent financial advisors want to join our team."

Lynnfield, Mass.-based Investors Capital is glad to support such partnerships. "Travis and Tony are very focused," Murphy says. He adds that there are many advisors in discussion about forming teams in order to boost their effectiveness, efficiency and client satisfaction.

The executive acknowledges that forming teams takes a lot of effort. "You have to have two parties that are willing to take the risk and give up sole ownership," he explains. Still, Investors Capital is eager to give its advisors access to the resources they have to team up.

Overall, Murphy sees the competitive marketplace today "as a watershed moment for the independent broker-dealer community as clients nationwide look to form relationships with advisors and firms that they trust. "We advise clients with objectivity. That's what being independent is," he explains.

Events like the national conference let Investors Capital advisors take advantage of the broker-dealer's network and build "relationships that last for years," Murphy notes.

"The last nine months have been challenging, but the next two years should be the best we've ever seen. Our objective is help our advisors grow your business and attract more clients," says Murphy.

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