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March 24, 2011 at 05:56 AM
FA Insight conducts research and provides consulting services across the advisor communities, assessing the trends of what makes an advisory firm stand out from the crowd in terms of revenue and profitability, and the best practices of how advisory firms are attracting employees to their firms through compensation and career path building. (See the latest article from Investment Advisor on the 2010 FA Insight Study of Advisory Firms: Growth by Design.)
One of its recent studies, conducted for Pershing LLC—The Race for Top Talent II—explored what FA Insight’s principals, Dan Inveen and Eliza DePardo, discovered about the human capital problems facing independent broker-dealers, where the average age of BD reps is rising while attrition from those ranks increases as well. (FA Insight is a continuing partner of Investment Advisor and AdvisorOne in conducting research among advisory firms: the 2011 Study is now fielding, and readers are invited to participate.)
In light of the legal troubles facing BD Securities America, and reports that many Securities America advisors are considering jumping ship—at least according to several recruiters—and the continuing uncertainty on how the fiduciary issue will play out in Washington, we thought it timely to speak with the researchers to gain their insights.
Eliza DePardo (left), who oversees FA Insight’s consulting services, took time out from her vacation to explore those possible ramifications in an e-mail interview.
These problems with Securities America—will they have a chilling effect on younger, newer people coming into the advisor field?
DePardo: Younger advisors will certainly be paying increased attention to the various career alternatives that are available to them. The Securities America private placement problems will likely be yet another catalyst for increased scrutiny of the benefits of joining a national BD. Affiliation with a national brand, the opportunity for structured professional development and the common perceived lower risk of joining a BD relative to joining an RIA will no doubt be increasingly open to debate among new entrants into the industry.
