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Meet The Indies

Meet The Indies

Q&A with CEOs of Cetera and AIG Advisor Network.

Q&A With Valerie Brown, CEO, Cetera, the parent company for former ING broker/dealers PrimeVest, Financial Network and Multi Financial.

Registered Rep.: Last year ING put your three b/ds on the block. How many advisors did you lose in 2009 — and were the Cetera b/ds able to recruit any advisors?

Valerie Brown: We did some recruiting last year, but also were under a lot of pressure from competitors because of the lack of certainty about the business. The gross dealer concession we lost was very small and the average producer we lost was producing $32,000 a year. Meanwhile, Multi-Financial had its best retention year ever.

RR: Are you seeing improvement so far in 2010?

VB: We are having success at building strong pipelines in 2010, and we will buck the down trend in wirehouse recruiting as we look at 2011. While the wirehouses were losing a lot of advisors to the fee-only RIA model last year, what many have identified as a new reality is that you need to provide the full range of product to your clients, including those that are only offered on a commissioned-basis.

RR: What are your long-term growth goals?

VB: Our goal for our b/ds over five years is to triple our assets. Our recruiting team has doubled this year to a little less than 30 people and we're still hiring. We are going to be acquiring b/ds.

RR: What does the ideal recruit look like for each b/d?

VB: PrimeVest is good for full service advisors who want referrals and a bank-like environment. The average production is around $100,000, though their President Group advisors do over $500,000 a year.

Financial Network trains people moving into this industry, career changers. Some regions cater to that $50,000 producer who wants to become a $300,000 producer. But a few regions focus only on advisors producing $800,000 to $2.6 million a year. MultiFinancial is for those advisors who really have their practice down, who want an intimate relationship with the home office, smaller offices. It's for the guy who does $350,000 in annual production and above.

All of the b/ds can leverage the back office and technology service options of Cetera. You get the customized fit and relationships of a small b/d with the large resources of a larger firm.

# Reps Assets Under Administration
Financial Network 2,407 $40B
PrimeVest 1,357 $20B
MultiFinancial 973 $15B
All Cetera BDs 4,737 $75B

Q&A With Larry Roth, CEO, AIG Advisor Group, parent company to FSC, Royal Alliance and SagePoint Financial.

Registered Rep.: AIG's b/d group was up for sale for much of 2009. Were you able to do any recruiting at all, or were you consumed with retention?

Larry Roth: AIG was in the midst of unprecedented market conditions, a global crisis in the financial markets and intense media scrutiny. For Advisor Group, being in the middle of this chaos was a challenge. That said, we were still able to recruit advisors to our broker/dealers in 2009. Now we have a great leader at the very top of the parent company — Bob Benmosche. Bob has taken the time to speak to our advisors about his decision to keep Advisor Group and his long-term commitment to our organization. And I have to tell you, our advisors love him.

RR: How do 2010 recruiting numbers compare so far?

LR: 2010 has been a great recruiting year for us thus far. To date, Royal Alliance, FSC Securities and SagePoint Financial have far exceeded recruiting numbers from 2009 and the firms are on track to meet and exceed 2010 recruiting goals. Royal Alliance brought in a major practice earlier this year, Rehmann Financial, one of the largest CPA and wealth management firms in the Midwest, and they should move about $2 billion in AUM to our b/d. SagePoint Financial brought in over $2 million in new recruits in the month of August alone and September was also a very strong month. In fact, SagePoint has already committed to a 50 percent increase in its recruiting goals for 2011. And FSC Securities Corp. has verbal agreements from a number of very large advisory practices to join the firm in the fourth quarter. And I am confident that 2011 will be a strong year for our firms as well.

RR: Have the sources of advisors you recruit changed at all?

LR: Advisors come to us from other independent broker-dealers and from wirehouses. But our biggest source of new recruits is advisor referrals. FSC and SagePoint Financial can attribute over 50 percent of their recruits to referrals, and at Royal Alliance, over 95 percent of recruits come from referrals.

RR: Have you made any changes in your recruiting strategy?

LR: We are increasing the incentives and resources to help our existing advisors recruit to their branches. We also held a recruiting summit earlier this year, attended by some of our largest OSJs, as well as many leading third-party recruiters in the industry. Our focus on recruiting includes an integrated marketing campaign, including advertising, new recruitment websites and materials for each broker-dealer, third-party recruiters to help establish leads, recruiting roundtables to support OSJ recruiting managers and a suite of transition services for new recruits. We're making even more enhancements to our transition services. We released a website that streamlines the affiliation process and makes it practically “paperless.”

FSC Royal Alliance SagePoint Financial
Advisors: 1,171 1,861 1,839
AUM (billions): $30.5 $44.3 $25.5
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