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Erica McGinnis President and CEO Advisor GroupHeadquarters New YorkNumber of producing advisors 6000Total firm AUM 1426 billion
<p> Erica McGinnis, President and CEO, Advisor Group</p> <p> Headquarters: New York</p> <p> Number of producing advisors: 6,000</p> <p> Total firm AUM: $142.6 billion</p>

The Recruiting Challenge This is a new role for you at Advisor Group. What is your strategy?

Erica McGinnis: My main goal is to continue to work closely with our four broker/dealer presidents to continue to retain our advisors and recruit new advisors to our firms. (Advisor Group has a retention rate of 97.5 percent based on GDC.) I also want to strategically and thoughtfully tackle the challenge of recruiting the next generation of financial advisors to our industry.

WM: What percentage of the firm’s ranks are women and how do you plan to improve that number?

EM: About 15 percent of our advisor population is women, and we are always looking at ways to recruit more women to our firms. We’ve held a very successful annual women’s conference for the last seven years, and recently launched a program called Generation i that is designed to help our current female advisors grow their practices, recruit more women to our firms, and bring more women into the financial services industry. Generation i is built on four main pillars: leadership, mentorship, development and outreach. The initiative is off to a strong start and I will be excited to see it grow and evolve over time.

WM: What pressures are IBDs under these days?

EM: It’s extremely challenging to be a small broker/dealer today. Trends we’ve been seeing for years—regulatory challenges, difficult economies, small profit margins, advances in technology —are all upon us, and small firms simply can’t compete. To succeed for the long-term, firms must be financially strong and well capitalized. You have to be able to make large investments in technology, compliance and other services, all while offering a flexible platform to advisors.

WM: Are things getting any better for this business?

EM: I believe that now, more than ever, people need financial advisors. Issues we saw arise a few years ago—issues people falsely believed would only last a few months or a year—continue to exist today. Market volatility, a fraying Social Security safety net, dwindling pensions, increased longevity and the realization that the only way to have a secure retirement is to fund it yourself—this is the new world we live in. And now, more than ever, people are looking to professional advisors for sound financial advice.

WM: Will all advisors and IBDs have to evolve towards a fee model or risk going out of business?

EM: I don’t think so. While I do think we will see more advisors move toward the fee model, I don’t think every advisor will do so. As an open-architecture, independent broker/dealer, we will not dictate the business model our advisors should use.

As advisors build financial plans for their clients, commission-based products that provide protection and guarantees, such as annuities and life insurance, may play an important role.

TAGS: People
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