The eight runners up in the 2018 Investment Advisor Broker-Dealer of the Year awards are being honored for their overall excellence in serving their advisors, who rated them extremely high in the latest poll, which had over 1,400 participants.
The BDs being recognized this year as runners up are: Lion Street Financial, Peak Brokerage, The Investment Center, Investacorp, Parkland Securities, Sigma Financial, Next Financial and Questar Capital.
The top executives of these firms have led the rollout of a variety of innovations over the past year or two, and they also have some interesting plans on the horizon for their affiliated advisors. We highlight recent and expected developments below and include each BD’s headcount from our spring Presidents Poll survey.
One of Questar Capital’s priorities in the past year has been the development of new revenue streams that its 640 advisors can tap to grow their businesses, says CEO & President Sherri Du Mond, particularly in investment advisory.
“Many of our reps had S65/66 licenses, but they weren’t necessarily doing investment advisory business,” she explained. “So we put in place tools and programs, along with home office staff, to help support them with investment advisory programs, help them grow assets under management [and] help them grow fee-based businesses.”
In light of the impending (but now vacated) Department of Labor fiduciary rule, Questar worked with its reps to move from upfront to deferred commissions or fees, encouraging reps and advisors to do both both brokerage and investment advisory business, and in some cases fee-based work.
Overall, they encouraged reps to “build multiple revenue streams to make their practice stronger and make their business more predictable,” Du Mond said.
For Barry Knight, president of Next Financial, focusing on technology has been job No. 1 of late. He’s quite proud of how well his “whole organization responded to all the changes in the industry” during the past year.
“Irrespective of DOL or the SEC, we’ve moved toward being more advisor focused, and that [meant] changes for some advisors, like with the platform or systems or supervisory aspects,” he said of Next’s 540 reps. “We’ve mastered those changes.”
Meanwhile, Jennifer Bacarella, executive director of firm development for both Sigma Financial and Parkland Securities (both runners up in their respective size categories), says these BDs also have prioritized technology and the integration of their platforms, so their combined 947 advisors can work better with clients.
Bacarella points out that they have been able to incorporate these shifts without any additional cost to their advisors. “We’ve worked hard in the past three years in designing [our] platform to make sure that [the different technologies] speak to each other, and so advisors have that very smooth, single [log-on] experience and can take care of everything they need for their clients in one place,” she said.
Keeping fees steady also is important to Ralph DeVito, president & CEO of The Investment Center, who says his firm hasn’t raised its fees in 13 years.
“In addition, we have made significant investments in technology, including a new advisor portal,” he says, adding that these costs have not been passed along to its 238 advisors despite the firm’s growth in numbers of reps and AUM, which means increased staff to “ensure that advisors continue to receive the customer service and support that they have been accustomed to.”
Plus, the BD has been taking care of cybersecurity enhancements. “Holding fees steady ensures that our advisors can continue to stay focused on growing their business, and not be distracted by any negative impact on their profitability,” DeVito said.
Investacorp, part of Ladenburg Thalmann Financial Services, is working hard to keep its boutique-firm feel, according to President Patrick Farrell. “Having Ladenburg there is useful, because it allows us to deliver some large firm resources that [we] wouldn’t have been able to provide” otherwise, he said.
Over the past year, Investacorp has been providing retirement plan consulting services and support to its 476 advisors and improving its fee-based advisory solutions — making them DOL compliant. “The changes we made were for the better, so we’ll be keeping those,” Farrell said.