Advisor Group President and CEO Larry Roth says most small broker-dealers “are gone or will be soon” due to the technology, compliance and other business costs.
“You cannot expect longevity if you’re a small niche player. This business is not for wimps,” Roth said in an interview on Monday.
Roth and the heads of the group’s three broker-dealers — FSC Securities, Sage Point Financial and Royal Alliance — spoke at length in an exclusive interview with AdvisorOne, which took place during the group’s 2011 women’s conference in San Antonio.
The three broker-dealers experienced an 18% rise in fees and commissions in January 2011 vs. the same year-ago period, Roth says.
“January was better than we expected,” he explained, “and we’re hopeful for 2011.” Roth says about 70% of these results are fee-based, with the remainder coming from commissions.
FSC Securities also announced that it is in the process of adding up to 50 financial advisors from QA3 Financial, which ended its broker-dealer operations in February.
Some 300 individuals from the Advisor Group and its sponsoring partners attended the Feb. 27-March 1 event, including nearly 200 of the firm’s female advisors, at JW Marriott Hill Country resort.
In 2009, Royal Alliance’s top producer was Meg Green, said Art Tambaro, head of Royal. “We don’t target women specifically in our recruiting,” Tambaro said. “However, we are glad to work with female advisors who want less restrictions to run their own business, such as one FA I’m bringing over from a wirehouse in the Midwest.”
Jeff Auld, head of SagePoint, says one of the broker-dealers’ advisors is helping him recruit a female advisor from a wirehouse firm. “She’s attending this conference to become better acquainted with us,” Auld said.
BD Legal Woes
A number of small broker-dealers have faced lawsuits “as product problems have come to fruition,” Tambaro says, leaving Royal Alliance, FSC and SagePoint with the chance to pick up large groups of advisors.