(Los Angeles) The Advisor Group’s three broker-dealers had strong results in 2011, according to President and CEO Larry Roth. The challenge will be to boost recruiting this year, while acquiring and attracting a higher number of advisors, he said at the group’s sixth annual Women’s Conference, taking place March 4-6 in downtown Los Angeles.
“Our results last year were excellent,” said Roth (below), in an exclusive interview. “Revenues were up 15% in flat market, and retention was as good ever — at 96.5%, like in ’07. Recruiting’s been good, though not as strong as a couple years ago,” he explained.
The Advisor Group, which includes more than 4,430 producing advisors, recruited some 400 advisors to its three broker-dealers — Royal Alliance, FSC Securities and SagePoint Financial — in 2011. But it’s raising the bar for 2012. “Our target is closer to 750 overall this year,” said Roth, who adds that more than 20% (or 886) of its reps are women.
One way the group hopes to do achieve this recruiting goal is by retooling its hybrid model for RIAs, says Art Tambaro, head of Royal. “We’ve been in this space for some 10 years or so … and are expanding what we do with various custodians,” he explained in an interview.
“We are refining the hybrid model so we can get institutional pricing to compete better,” Tambaro noted. Plus, there are reps that are using other independent broker-dealer platforms who have expressed a desire to move to — and, in some cases, return to — the Advisor Group given its more robust platform, he added.
The Advisor Group’s reps have about $100 billion in assets of which some $35 billion is in fee-based accounts. More than half — at least $20 billion — is being managed by advisors with hybrid operations.
“Our value comes in compliance,” said Roth. “Some firms do not necessarily do this work [the way Advisor Group does] for independent RIAs. We expect these RIAs to wake up with today’s regulatory environment and say, ‘I really need someone to do this compliance and supervision work for me.’ ”
For Advisor Group, “We want to deliver a better operating environment versus the excellent one that we now offer. And we want to do it better than all the other alternatives, meaning the six or seven other hybrid-platform options out there,” he emphasized.