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Industry Spotlight > Broker Dealers

Larry Roth: The 2012 IA 25 Extended Profile

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It’s almost as if Larry Roth stole Burger King’s “Have it your way” tagline, except it directly affects advisor and client well-being rather than how one might like their fast food.

“We are absolutely committed to redefining what open architecture means,” Roth explains in his no-nonsense style. “We’ve trademarked ‘All Ways Open Architecture’ and have built a platform that lets advisors grow their businesses in the way that suits them best.”

Once written off as just another victim of Wall Street headline risk, the CEO of Advisor Group proved detractors wrong, steering the three broker-dealers for which he’s responsible (SagePoint Financial, FSC Securities and Royal Alliance Associates) through arguably the toughest business cycle in our nation’s history—and that’s no hyperbole.

2012 IA 25While other firms are content to “go along to get along” as the economy sorts itself out, Roth is taking a leadership position not only at his own firm, but in the industry as a whole through his involvement with the Financial Services Institute, where he is the advocacy organization’s vice chair in 2012. He wants a seat at the table during the rebuild, an indication that he’s focused squarely on the future of the advisor business.

“Many other firms are self-clearing,” he says. “They require you to custody with them and use their CRM and other technology. We went in the other direction. We’ve worked it out with Pershing and Fidelity where we have greater operational control, which means the advisor therefore also has more operational control.”

He specifically points to the firm’s Wealth Management Platform (WMP) as a recent initiative designed to attract successful advisors in the hybrid space, as well as the firm’s ongoing investment in technology.

“I’m proud of the fact that even during 2008 and 2009, we invested heavily in technology, and we continued to do so in 2010, 2011 and now in 2012,” he adds. “It’s this kind of commitment that, even with everything going on in the industry and at the macroeconomic level, we experienced a 15% revenue increase over last year.”

As for his strategy moving forward? While smaller firms shut their doors and large insurance companies sever ties with the BD world, Roth and the Advisor Group are ready to buy.

“We’re looking for acquisitions of other broker-dealers as well as super OSJs,” he says. “Our business is built for advisors and firms of a larger size, so we’re going after those that have outgrown their current platform.”

When asked about the issues that will most affect advisors in the near term (12 to 18 months), Roth is nuanced.

“Our sense is that it will be varied depending on the type of advisor,” he predicts. “We’re seeing a lot of well-capitalized OSJs, and it’s the hybrid advisor that really helps these firms grow. If you’re part of an OSJ with a smaller broker-dealer, you’ll have to make a decision soon as to whether or not you want to jump to a larger firm to really take-off. We want to be ready for them when they make that decision.”

With all the confusion and craziness in the regulatory space, Roth says the firm is bent on providing advisors with systems that help them deal with whatever may come their way, whether it’s something surrounding the fiduciary standard of care, Department of Labor regulations on retirement planning or something completely different.

Echoing the enthusiasm he shared with us late last year (see “Retirement Reset,” Investment Advisor, December 2011), Roth concludes, “This a great time for advisors. I haven’t been this excited since 2007. We want the advisors to focus on their businesses and focus on their clients and leave the headaches to us.”


Find out who was named on the 2012 IA 25 in Investment Advisor’s May issue.

Check out more extended interviews of the 2012 IA 25 at AdvisorOne.


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