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October 01, 2008 at 04:00 AM
Raymond James Financial Services’s (RJFS) national conference, in Washington in late August, drew an impressive 968 advisors. One of the hot topics at the conference was Raymond James’s new relationship packaging initiative, which is designed to improve the way advisors interact with the home office and refocuses client issues from specific products and services to one based on the overall client relationship. Part of that initiative says Dick Averitt, chairman and CEO of RJFS, includes RJFS’s new Freedom Retirement Income Solution, which enables advisors to design and offer to clients three separate income models–one based on early retirement, another for mid-retirement, and a third for senior retirement. Each scenario uses Monte Carlo simulations based on longevity risk, inflation, and distribution amounts. Later initiatives will likely include cash management, small business, and legacy solutions. Washington Bureau Chief Melanie Waddell chatted with Averitt at the conference about issuing affecting independent advisors.
What do you see as the biggest challenge for independent advisors?
Continually experiencing declining fee and commission revenue. There’s more money to touch but you get paid less to touch it. That’s a long-term [challenge].
What is the short-term challenge?
I’d say one of the issues that concerns independent advisors is that many have built their practices using C shares. There’s a great deal of conversation about eliminating, reducing, or tapping them. So advisors who have built a practice using C shares to service their clients are wondering whether they have to go into RIA accounts–in other words no-load accounts–so they can charge their own fee. That’s a transition for the clients, for the advisor, and is likely to be more expensive for the client. That point is not well understood by regulators.
