Five Questions for a Top Broker-Dealer Executive

A discussion on recruiting and advisor growth with Barnaby Grist of Cetera Financial Group, formerly ING Advisors Network.

Why did you join Cetera?

Barnaby Grist: It was not a move that I expected to make. I saw something very special.

The core of what we're doing is going out to accelerate the move of advisors away from the wirehouses.

Like the recent trend of SMA growth at the non-wirehouses -- which is tied to the fact that consumers prefer the freedom, flexibility, lack of conflict and the boutique feel from the independent model -- this movement is about advisors feeling trapped by the wirehouse-model's walls.

How can broker-dealers like Cetera, which has about 5,000 FAs, help advisors make the jump to independence?

We are a large firm, the second- or third-largest in size in our market, with the technology, processes and other elements that advisors need to do their jobs as they want to, and we have the right talent and have streamlined many processes so they can be efficient.

We also have a multi-broker-dealer model.

The wirehouses are like the traditional department stores, but customers today want more flexibility and choice. These big stores won't go away, but there's more growth with the independent shops.

And, to continue with the analogy, advisors who want to work independently don't have to set up their own shop; we do it for them, by offering them a pre-built shopping mall to do business in.

Advisors don't have to get things like the plumbing or the permits sorted out. We provide this type of infrastructure - compliance - so they can focus on what they do best.

Plus, we give them choice with our three broker-dealers: Financial Network, Multi-Financial and PrimeVest.

We are in the process of reshaping the business.

What else do you think wirehouse advisors are looking for?

The wirehouse advisors want the benefits of being independent, but they don't want the hassle of dealing with the infrastructure issues and having many layers of colleagues.

What type of advisor is Cetera more interested in working with?

We aren't targeting a specific production level but rather the advisor for whom we are best able to create the experience that enables them to grow.

What are your recruiting plans?

This may seem initially surprising, but our number of advisors could fall as we've historically had had many small[er-producing] advisors and that area may not be where we want to focus in the future.

In 2009, we shed some 2,000 advisors, some of whom had average gross dealer concessions (or fees and commissions) of $32,000.

We are look at many ways of recruiting, and a big component of this effort will be done in house. We'll also thinking out of the box as we do this work, and our Chief Marketing Officer Susan Theder, formerly of Pershing, is doing direct mail and taking other steps.

It takes a while to start the recruiting engines, but we have doubled the recruiting force in the last six months, and we've invested heavily in really developing top-quality products, practice management and other capabilities.

Thus, we're very optimistic. Things should get really exciting here!

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