What was the highlight of your 2009 results and what do you anticipate for your recruiting results in 2010?
In 2009, we attracted 160 advisors into the channel. That was a very successful year.
We expect recruiting in 2010 to be in that neighborhood, with growth that could be anywhere from flat to up to 10 percent above that.
One of the key measures we look at is new qualified leads, which means new demand for the business model.
The number of new experienced advisors that we spoke with for the first time was a record in the first quarter of 2010. Thus, we still see a lot of demand for the model and a lot of interest on the part of advisors in exploring it.
What are advisors’ views on independence these days?
There is some misunderstanding of what being independent truly is, which isn’t for everyone. However, more and more advisors have witnessed a colleague going independent, either with us or with one of our competitors, and they see it has worked for this advisor and that the advisor is happy in that environment.
More are asking for us to tell them more about the independent model, and they want to learn more about it.
We are also seeing longer lead times for advisors to make decisions than during the late ’08 and ’09 period, when we saw a condensed due diligence period.
This means we’re moving to eight to 12 months as a decision-making timeframe.
Where are your new advisors joining from, and why?
All 160 advisors last year came over from rival firms. UBS, Morgan Stanley Smith Barney and Merrill Lynch represent about 70 percent of the advisors that join us historically, and that did not change during the crisis. We expect that this situation should remain to be the case.
About 95 percent of all advisors that join us have been an employee at a competitor, and the average level of experience is 19 years.
In addition to the brand, it’s the depth and breadth of our product platform. If you’ve been at a national full-service firm your entire career, you know what you are going to get at Wells Fargo Advisors, a national full-service product platform.
And you’re getting the brand. It’s a combination and a unique intersection where we sit, between the brand and the national full-service platform coupled with an ability to operate your own business. That’s the unique nature of our space.
We let advisors have a choice in branding their business. They can choose to fully leverage the Wells Fargo brand and operate fully as a Wells Fargo Advisors Financial Network-branded practice.
They can also custom brand, name their own business and run it that way.
Our value proposition is based on the concept of simplifying independence. We have focused at becoming experts at helping advisors who have been employees their entire career make the leap to independence.
What growth do you see on the horizon and what are you doing to take advantage of it?
We’re investing in the business in order to continue to grow the franchise organically. We believe the shifting preference of advisors towards independence is a long-term trend.
As we’ve explained, we have gone from six to nine regions to make sure that we have the right representation in the geographic markets that are critical to our growth.
We thought that 20 percent of advisors in the national full-service firms are predisposed to independence in general. For the last nine years, we’ve been looking for those 20 percent that are predisposed.
We did some independent research in the fourth quarter of 2009 and early 2010, though, that uncovered a pretty unique opportunity.
It verified or confirmed that 20 percent. But we also learned something about our assumption 80 percent are not predisposed to independence: Only 20 outwardly reject the concept of independence.
This means that all of a sudden you have this emerging middle group, 60 percent, saying, “I don’t know, so much has changed and I am open to learning more about it and am willing to listen.”
That is a huge opportunity if it plays out. Thus, we are investing in our business in order to capture that market share, the 60 percent looking at independence.
Can you describe your recruiting efforts?
We have five sources for lead generation.
First, our existing business owners or independent advisors; second, a network of external recruiters; third, a regional director network with professionals that have 17- 22 years of industry experience and are responsible for the nine regions; fourth, our marketing and advertising efforts; and fifth, a fifth a catch-all of other sources.
Supporting all of this is our FA integration group, which helps manage our recruiting lead flow.