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Financial Planning > Behavioral Finance

The 2013 Broker-Dealer Reference Guide

By John Sullivan, Liana Roberts

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Raging bulls, skyrocketing energy production, baby boomer retirement—for such a seemingly volatile industry, in the past year, surprisingly little has changed. The same regulations—and specter of future regulations—continue to excite, fee compression pressure builds and grandiose predictions of boom and bust clog conventional wisdom. Through it all, independent broker-dealers continue to execute, mindful of the needs of the advisors and the clients they serve. So the “positions have changed, the names remain,” may be perhaps the most succinct way to describe this year’s guide, our annual temperature-taking of the independent broker-dealer industry.

Click through the following pages to see the top independent broker-dealers by annual revenue, number of reps and more. You can also download a PDF of the guide here.

By Annual Revenue

LPL Financial, Raymond James Financial Services and Commonwealth Financial Network—the perennial “Big Three.” Who will come along to shake things up? Are there contenders on the horizon? One obvious point is how Cetera listed themselves. Combine the BD group’s three entries and they make a run. Interesting to see Royal Alliance land in the top 10 after everything parent company AIG Advisor Group has endured (For more on that, see Larry Roth’s extended profile from the 2013 IA 25 on AdvisorOne.com).


Rank

Company

2012 Gross Revenue ($ Mil.)

2012 BD Total Expenses ($ Mil.)

2012 Fee-Based Revenue ($ Mil.)

2012 Avg. BD Concession per Rep ($ Thous.)

1

LPL Financial LLC

$3,580.0

$3,200.0

$1,050.0

$211.6

2

Raymond James Financial Services

$1,180.0

$1,060.0

$411.6

$356.5

3

Commonwealth Financial Network

$712.1

NA

$374.2

$400.6

4

AXA Advisors, LLC

$625.0

NA

NA

NA

5

Northwestern Mutual

$553.6

NA

$236.9

$70.3

6

Cambridge Investment Research, Inc.

$461.4

$436.4

$230.7

$191.5

7

Securities America, Inc.

$444.3

NA

$158.5

$253.5

8

Royal Alliance Associates

$388.4

NA

$160.8

$208.0

9

NFP Advisor Service Group (& Affiliates)

$364.8

NA

$104.0

$282.5

10

Waddell & Reed Financial, Inc.

$361.6

$371.1

$115.8

$168.2

11

Cetera Advisor Networks

$360.5

$358.5

$137.9

$176.6

12

National Planning Corporation

$346.8

NA

$87.8

$210.0

13

Securian Financial Services

$291.2

NA

$55.2

$99.5

14

Signator Investors, Inc.

$263.0

$282.8

$31.6

$76.5

15

FSC Securities Corp.

$263.0

NA

$87.7

$219.0

16

H.D. Vest Financial Services

$248.3

NA

$87.0

NA

17

Woodbury Financial Services, Inc.

$243.3

$243.3

$29.8

$155.0

18

Princor Financial Services Corporation

$242.0

$235.6

$30.9

$98.4

19

INVEST Financial Corporation

$236.8

NA

$43.7

$181.8

20

SagePoint Financial, Inc.

$236.0

NA

$64.0

$147.0

21

First Allied Securities, Inc.

$233.0

$230.3

$68.7

$292.5

22

Transamerica Financial Advisors, Inc.

$232.6

NA

$52.5

NA

23

Cetera Advisors

$210.0

$206.0

$72.4

$194.6

24

Cetera Financial Institutions LLC

$192.2

$183.6

$10.6

$113.3

25

SII Investments, Inc.

$166.3

NA

$40.8

$242.4

All data is as of December 31, 2012, and was supplied by the broker-dealers themselves. Investment Advisor has not independently confirmed the data.

By Number of Reps

As any M&A advisor will surely say, the value of a business is only the sum of its people. It’s one reason rep retention is always a focus with our Broker-Dealer of the Year award winners each September. Cost aside (we all know the difference in expense between recruiting and retaining), but a happy rep force makes it pleasant to come to work every day, and ensures they truly are doing what’s best for the client.


Rank

Company

Producing Reps

Reps Added in 2012

Reps Dropped in 2012

Firm’s Years in Business

1

LPL Financial LLC

13,336

NA

NA

45

2

Northwestern Mutual

5,667

NA

NA

45

3

AXA Advisors, LLC

4,673

990

1,055

13

4

H.D. Vest Financial Services

4,581

433

553

30

5

Transamerica Financial Advisors, Inc.

4,565

668

NA

29

6

Raymond James Financial Services

3,205

508

508

37

7

Cambridge Investment Research, Inc.

2,241

514

331

32

8

Princor Financial Services Corporation

2,049

384

340

45

9

Waddell & Reed Financial, Inc.

1,763

331

384

76

10

Securities America, Inc.

1,724

NA

NA

29

11

Cetera Advisor Networks

1,710

133

265

30

12

Royal Alliance Associates

1,702

124

142

24

13

SagePoint Financial, Inc.

1,650

168

194

43

14

Signator Investors, Inc.

1,602

338

411

45

15

Cetera Financial Specialists

1,470

1,627

157

32

16

Commonwealth Financial Network

1,445

126

95

37

17

National Planning Corporation

1,388

180

202

15

18

Cetera Financial Institutions LLC

1,343

272

342

29

19

NFP Advisor Service Group (& Affiliates)

1,291

70

127

16

20

Ameritas Investment Corp.

1,276

107

158

28

21

INVEST Financial Corporation

1,188

204

173

30

22

Cetera Advisors

1,076

324

72

32

23

FSC Securities Corp.

1,064

74

135

55

24

Securian Financial Services

1,053

NA

NA

29

25

Woodbury Financial Services, Inc.

1,050

83

371

103

All data is as of December 31, 2012, and was supplied by the broker-dealers themselves. Investment Advisor has not independently confirmed the data.

By Highest Average Production

For quality over quantity, Commonwealth takes the cake. The Waltham, Mass.-based home of the “sophisticated advisor” prides itself on providing the necessary accoutrements of high production—first-rate transition team, cutting-edge technology and, of course, vice president of practice management Joni Youngwirth (see “Power in Practice: Wrapping Up,” Investment Advisor, June 2013).


Rank

Company

Avg. Annual Gross Production per Advisor

Avg.  AUM per Advisor ($ Mil.)

AUM in Fee-Based  Programs ($ Bil.)

Excess Capital ($ Mil.)

1

Commonwealth Financial Network

$400,639

$54.6

$33.4

$12.7

2

Raymond James Financial Services

$356,535

$44.6

$53.5

$15.8

3

VRS Financial Services, Inc.

$345,130

NA

$3.7

$1.9

4

Geneos Wealth Management, Inc.

$343,086

$45.0

$4.5

$0.4

5

Prospera Financial Services

$300,000

$28.0

$1.2

$2.5

6

Founders Financial Securities, LLC

$296,534

$26.0

$0.4

$0.7

7

First Allied Securities, Inc.

$292,534

$28.9

$6.3

NA

8

NFP Advisor Service Group (& Affiliates)

$282,533

$55.7

$10.8

$17.2

9

M Holdings Securities, Inc.

$254,272

$17.2

$3.5

$1.4

10

Securities America, Inc.

$253,485

$27.3

$14.6

NA

11

SII Investments, Inc.

$242,430

$29.0

$4.3

$7.8

12

Summit Brokerage Services, Inc.

$235,000

$30.0

$1.6

$6.0

13

Triad Advisors

$224,554

$30.1

$2.4

$2.3

14

FSC Securities Corp.

$219,000

$24.0

$10.9

$12.1

15

Investment Centers of America

$217,240

$30.6

$1.8

$6.7

16

Williams Financial Group

$213,000

$30.0

$1.7

NA

17

LPL Financial LLC

$211,637

$28.0

$122.1

$98.5

18

United Planners Financial Services

$210,000

$25.1

NA

$4.4

19

National Planning Corporation

$209,957

$25.9

$9.5

$11.5

20

Royal Alliance Associates

$208,000

$26.0

$18.0

$10.6

21

Securities Service Network, Inc.

$206,064

$30.6

$6.2

$3.7

22

Cambridge Investment Research, Inc.

$205,900

$21.7

$25.4

$14.6

23

Cetera Advisor Networks

$197,634

NA

$12.7

$2.4

24

Cetera Financial Institutions LLC

$197,634

$30.0

NA

NA

25

Kalos Capital

$190,000

$20.0

$3.5

$2.8

All data is as of December 31, 2012, and was supplied by the broker-dealers themselves. Investment Advisor has not independently confirmed the data.

By Friendliness to RIAs

Might there be a reason so many BDs have taken to the independent channel? Jim Dario, managing director of product management for TD Ameritrade Institutional, noted at this year’s NAPFA spring conference in Las Vegas that the independent channel is the fastest growing channel in financial services, and has experienced 68% growth since 2005. “One group’s pain is another group’s gain,” Dario said.


Rank

Company

Reps With Their Own RIA

CFPs in Total Rep Force

Average Years Experience (per Advisor)

1

Triad Advisors

83.0%

36.9%

18

2

Securities Service Network, Inc.

52.3%

31.9%

NA

3

United Planners Financial Services

32.9%

23.5%

15

4

Royal Alliance Associates

27.9%

NA

NA

5

American Portfolios Financial Services, Inc.

25.5%

11.0%

18

6

National Planning Corporation

19.2%

NA

NA

7

Securities America, Inc.

18.7%

27.6%

NA

8

Cambridge Investment Research, Inc.

15.4%

26.5%

18

9

LPL Financial LLC

15.3%

NA

14

10

Geneos Wealth Management, Inc.

14.7%

31.3%

20

11

Crown Capital Securities, L.P.

14.1%

22.1%

17

12

Independent Financial Group

14.0%

15.2%

17

13

Commonwealth Financial Network

13.1%

45.5%

NA

14

LaSalle St. Securities LLC

12.8%

9.0%

14

15

First Allied Securities, Inc.

10.0%

21.6%

19

16

The Strategic Financial Alliance, Inc.

9.9%

14.7%

NA

17

FSC Securities Corp.

8.7%

NA

NA

18

WRP investments, Inc.

8.6%

16.3%

53

19

SagePoint Financial, Inc.

7.8%

NA

NA

20

Prospera Financial Services

7.1%

9.7%

22

21

Capital Investment Companies

7.0%

11.1%

NA

22

Capital Financial Group/H. Beck, Inc.

7.0%

7.9%

NA

23

M Holdings Securities, Inc.

6.7%

13.0%

NA

24

Investors Capital Corporation

6.4%

5.9%

13

25

Kalos Capital

6.1%

7.6%

18

All data is as of December 31, 2012, and was supplied by the broker-dealers themselves. Investment Advisor has not independently confirmed the data.

By Home Office Support

Service, service, service—the quality of the person on the other line, their technical expertise, how receptive they are to ideas and concerns, and whether or not they call you back in a timely manner are critical components in the aforementioned rep retention. Invest in your home office staff or spend more on recruitment to make up for advisors who leave. Either way it will cost you, but in this case, less is better.


Rank

Company

Ratio of Reps to Home Office Staff

Home Office Staff

Staff Recruiters

Compliance Professionals

1

Century Securities

1.0 : 1

150

1

50

2

Raymond James Financial Services

1.3 : 1

2,495

9

103

3

Correll Co. Investment Services Corp.

1.5 : 1

4

0

1

4

Cetera Financial Institutions LLC

2.5 : 1

547

NA

NA

5

First Allied Securities, Inc.

2.5 : 1

261

5

59

6

Cetera Advisors

2.5 : 1

427

NA

NA

7

Commonwealth Financial Network

2.7 : 1

540

7

48

8

PlanMember Securities

3.0 : 1

128

4

5

9

Prospera Financial Services

3.1 : 1

37

3

5

10

Williams Financial Group

3.1 : 1

84

2

9

11

Kalos Capital

3.1 : 1

21

1

3

12

Cetera Financial Specialists

3.5 : 1

423

NA

NA

13

Investment Centers of America

3.7 : 1

85

2

15

14

VRS Financial Services, Inc.

3.7 : 1

74

1

8

15

Cetera Advisor Networks

3.8 : 1

448

NA

NA

16

Berthel Fisher & Co. Financial Services, Inc.

4.4 : 1

74

3

8

17

J.P. Turner &Company, LLC

4.5 : 1

100

4

10

18

Cambridge Investment Research, Inc.

4.5 : 1

497

26

52

19

Summit Brokerage Services, Inc.

4.5 : 1

76

5

12

20

Securities America, Inc.

4.6 : 1

378

11

67

21

LPL Financial LLC

5.0 : 1

2,687

NA

317

22

Founders Financial Securities, LLC

5.0 : 1

12

1

3

23

FSC Securities Corp.

5.3 : 1

202

3

28

24

Woodbury Financial Services, Inc.

5.3 : 1

199

21

37

25

NEXT Financial Group

5.3 : 1

146

5

29

All data is as of December 31, 2012, and was supplied by the broker-dealers themselves. Investment Advisor has not independently confirmed the data.

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