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Practice Management > Building Your Business

Unusual Suspects

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Market conditions notwithstanding, advisors are always seeking to improve their business. For many, this involves changing business partners in the quest for better service, better rates, and better client satisfaction. So how can you tell broker/dealers apart, what new products and services are they offering, and what are B/D’s looking for in new reps? To answer that question, we spoke to several people in the know and we also conducted How’s the job market for reps? The volatile stock market and slowdown in business have led to a corresponding sluggishness in the rush to fill jobs, according to Mitch Vigeveno, president of Turning Point, Inc., a recruiting and consulting firm in Clearwater, Florida. B/Ds, however, are still looking to increase distribution, so any rep who can bring along a sizable book of business would be attractive, of course.

There is another upside for advisors:”All the B/Ds are really forced into the position where they have to come up with value-added services for their reps,” Vigeveno says. “Everybody’s looking to see what they can do to get reps to do business with them.” In fact, one company has gone so far as to create a Web site offering tons of information on what “reps should look for when they change B/Ds,” says Vigeveno. “That’s not the business the company is in,” he continues, “but they’re putting this information on their site so that reps will be attracted.”

Market wariness has also led to fewer advisors seeking a new B/D, and delays in moving to a new one. Carol Sandstrom, a recruiter for Sentra Securities, also in Clearwater, Florida, says many of the moves she sees had been in the works before the market really moved downward and fears for the economy intensified. Advisors who might otherwise be considering switching do not want to spring anything new on their clients when those clients need handholding.

The factors driving the moves? “A lot of the same complaints,” Sandstrom says, such as “nonresponsive service, or the technology side is lacking or isn’t user-friendly. The most common complaint is that nobody calls back–that kind of [lack of] personal service.” Sandstrom thinks the differences between B/Ds are closing. “Payouts are relatively the same, they have full product lines, and benefits are relatively the same. It boils down to customer service and ‘warm, fuzzy’ feelings, and whether they’re [advisors] treated as important people.”

If broker/dealers are less diverse, reps’ needs are changing. As business gets more complex and as more advisors compete for the new wealth market, reps require more specialized services. In January, for instance, Raymond James Financial Services launched a division to serve independent fee advisors. How is that faring? “Better than we expected at this early stage,” says Raymond James Senior VP Mike Di Girolamo. “We’re ahead of schedule for advisors and assets joining the firm.” He argues that there’s “some dissatisfaction out there with some firms.” What problems has he heard about that drove independent advisors to Raymond James? Costs and service levels, for one.

“There were some complaints from one of the biggest independent advisors that joined us,” he says. The advisor’s old B/D was “nickel and dimeing him and his clients to death; charges to clients were high on wire charges and account administration.” Another thing that set off advisors’ moves was direct marketing between custodians and the advisors’ clients.

To encourage advisors to move, the Raymond James Independent Advisor Division has beefed up content on its Web site for prospective reps, and has improved marketing materials. “We’re working on improving one of our fee-based accounts,” Di Girolamo mentions, “and on offering more flexibility in how advisors access no-load mutual funds and how they can structure trading costs.” They can choose either no transaction costs or keep them low. The company also says it’s improved the software used for account management.

There’s also the Goldman Sachs Prime Access research, which Raymond James now provides to its independent advisors.

Tony Greene, chairman and CEO of Raymond James Financial Services, provides the big picture. “Part of the future for the financial advisor, and for us, is to provide comprehensive solutions for clients.” This does not include just financial planning, he says, but a broader spectrum of services like estate planning.

Greene says that one of Raymond James’s big initiatives is to help financial advisors develop strategic relationships, and to do it online. Margie Blue, VP of marketing, gave some examples. “We’re encouraging advisors to use technology to deliver value-added services to their clients,” such as providing electronic newsletters. Raymond James also delivered two Webcasts recently that addressed market volatility and how it affects clients. The Webcasts were placed on the Raymond James public site. “We encouraged our advisors to let their clients know about it,” says Blue, “and to sign on to the public site and hear from industry experts.”

The company is also working on an alternative investments offering that will include, says Greene, “venture capital funds, hedge funds, and merchant banking services for high-net-worth individuals.” These new options likely will lead to “banking services that are offered by our firm and packaged a little differently.” Blue points out that clients will still have to go through their advisors for these services.

Yet another improvement in the works, says Greene, is the aggregation of statements. “We have several hundred relationships with banks, and we are developing a program to put bank statements and our statements together [for] clients.”

“We’ve got three people working on nothing but account aggregation,” according to Mike Shelly, vice president of technology at Raymond James. The firm is evaluating client and advisor needs, he says, and looking at information aggregation both internally and externally, talking with companies such as Yodlee and GreenTrak to determine the best methods to implement it.

With plans like these, it’s no wonder that Raymond James is attracting some attention among advisors. Other companies are offering improvements, too. If you’re not happy where you are, there may be a better fit waiting out there somewhere.


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