Unusual Suspects

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.