This is Valerie Brown’s first appearance on the IA 25. Click here to view the complete list and Special Report schedule for extended profiles for each of the 2013 IA 25 honorees.
It seems inevitable that Valerie Brown should end up where she has. The daughter of a financial planner, the CEO and president of Cetera Financial Group said she grew up with a love for and comfort with numbers and math. Her background in chemical engineering, which she called a “perfect fit” for the financial services industry, didn’t hurt, either.
“Chemical engineering teaches their students to take what are often pretty ambiguous problems and structure them and try to identify practical solutions,” Brown said of her undergraduate studies. “That’s a good overview of what many of us in this industry deal with: challenging problems and helping clients figure out their retirement plan in an environment where interest rates are pretty close to zero.”
In fact, that particular challenge is one of the biggest affecting advisors today. “Given that a lot of clients and retirement assets are sitting with the baby boomers, who are either entering, in or close to retirement, this low-interest-rate environment is challenging everybody,” Brown said. Also hitting boomers and their retirement strategies is “a pullback in the insurance industry from giving people guaranteed income that a lot of the annuity products provided.”
There is good news, Brown said. “The market’s done very well. This is the fourth year running that we’re having a continuation of good market returns.” She noted, though, that “while clients’ fee-based businesses continue to do well, the commission side of the business has not been growing as rapidly as it was pre-crisis. That tells you middle-market America, where commission-based products often fit better, is still standing on the sidelines.”
Those “stresses,” as Brown called them, affect not just advisors, but product manufacturers as well. “Continuing to innovate around those issues is a challenge for all of us as we go forward,” Brown said.
Brown said Cetera’s main focus is “continuing to help our advisors grow their practices, their relationships with their clients and serve them better every day. That’s what they’re focused on, and we’re focused on supporting them in doing that.”