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Time to Move?

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If there’s one theme in the industry that nearly everyone seems to share, it’s that the time is right, now, for the movement of advisors and their clients’ assets.

Following a week where I attended two big conferences—the annual FSI conference in Phoenix for independent BD executives and the TD Ameritrade Institutional conference in San Diego—and one much smaller gathering, that of Commonwealth Financial’s annual Chairman’s Retreat in Boston, the theme was repeated in different ways. In separate conversations in late January and early February with the likes of Elliot Weissbluth of HighTower, Dale Brown of FSI, Tom Bradley of TD and several executives at Commonwealth, they repeated the mantra: 2011 will be a year when breakaway brokers and disaffected indie BD reps finally pull the trigger and decide to see if the grass is really greener on the other side of the fence.

That fence is perhaps less daunting now that the markets have apparently decided that we’re in the midst of a true recovery, one that won’t be shaken by European bank and sovereign debt troubles, by the shrill level of partisanship in Washington over deficits, health care and taxes, by the ongoing budget issues in the states and even by political turmoil throughout Egypt and the Middle East.

Multiple BD execs have told me that consolidation in that space is likely, driven by increased costs emanating from conducting more due diligence on products and their managers, and by the increased costs of staying compliant engendered by tougher regulations from the SEC and the Dept. of Labor.

For those companies that partner with advisors, this burgeoning movement is an opportunity, but also a risk. The greatest offering advisors provide to their clients is the personal touch: customizing as much as possible an investment strategy that meets clients’ needs amid changeable markets and an evolving world. The greatest offering advisors’ partners such as custodians and broker-dealers provide to their advisor clients is to retain a personal touch while providing the technology, practice management tools and alpha-producing yet risk-aware investing vehicles that advisors need to attract and retain clients and increase operational efficiency so they can grow their businesses and better serve their clients.

At Pershing Advisor Solutions, the subject of this month’s cover story, Mark Tibergien, has rebuilt a custodian in his own image that offers top-notch technology and custody of alternative assets, access to 30 overseas markets for trading in local currencies, bank custody for family office assets and plenty of practice management assistance. In the interviews leading up to the article, it became clear to me that the key to Pershing’s success, as Tibergien has preached for years, is its people: Not just finding qualified, talented people, but putting them in the proper positions where they can use their talents to leverage the firm’s non-people assets and further the firm’s goals. Sounds like a good plan for an individual advisory firm as well.