IMCA attracting more independent planners, advisers

The Investment Management Consultants Association has been attracting more independent planners and advisers.
FEB 18, 2008
The Investment Management Consultants Association has been attracting more independent planners and advisers. Although brokers from the wirehouses and regional firms comprise 53% of the group's membership, the number of independent representatives, financial planners and registered investment advisers has been growing faster, according to IMCA officials. IMCA this month released selected demographic data from a first-ever job-analysis study of its members. In 2003, independent reps and advisers made up about 11% of IMCA's membership. But last year, that figure had grown to more than 15%, IMCA said. More new advisers are starting in the independent channel and veterans are migrating to independent options, said Edythe "Dede" Pahl, IMCA executive director.

INDIES GET THE WORD

Many independent advisers haven't known about IMCA, she said. But "word is getting out more in the independent channel," said Sean Walters, IMCA's executive deputy director. Greenwood Village, Colo.-based IMCA awards the certified investment management analyst designation. As of last month, it had 7,096 members, and about 5,900 of those members held the CIMA designation. Holders of the CIMA designation work with retail investors and small institutions in designing investment plans and monitoring performance. It isn't clear how many of IMCA's independent members are registered reps as opposed to advisers, Mr. Walters said. In the survey, IMCA members could describe themselves as an independent consultant without making the distinction between broker and adviser. In the RIA channel, Mr. Walters said that IMCA is seeing an increasing number of investment specialists at advisory firms who focus on just money management. "That's the perfect person for a CIMA," he said. Additionally, IMCA was surprised to find that it had a relatively large contingent of younger members, Ms. Pahl said. Thirty-one percent of CIMA professionals are between the ages of 20 and 40. That is a large cohort compared with other industry designations, IMCA said. "There's not enough [advisers] being trained by their elders," Ms. Pahl said. "That's another reason for certification programs." Membership from wirehouses and regionals has been steady for the past five years, Ms. Pahl said. IMCA has over the years marketed itself to Wall Street firms. At the larger firms, "there's been a good push ... to get those [CIMA] designations," said Chris Lamb, a CIMA holder and co-founder of Old Mission Investment Co. LLC of Traverse City, Mich., and a former broker at Wachovia Securities LLC of St. Louis. Some 20% of IMCA's members hail from Merrill Lynch & Co. Inc. of New York. Brokers from Smith Barney, the brokerage unit of Citigroup Inc. of New York, and UBS Financial Services Inc. of New York are also heavily represented, with 8% of IMCA's membership from each firm. Other firms with significant representation include Morgan Stanley of New York (5%), Wachovia Securities (4%), RBC Dain Rauscher Inc. of Minneapolis (2%) and A.G. Edwards & Sons Inc. of St. Louis (1%). Wirehouses have seen the value in the CIMA program, said Michael McCall, an independent adviser at Michael J.D. McCall Inc. in Los Angeles, a CIMA holder and a former wirehouse rep. "They've come to the conclusion ... that a better educated, trained adviser is good for sales." The CIMA training is "certainly challenging," Mr. McCall said. IMCA hasn't tailored its educational events to the wirehouse audience, observers said."Every time I listen to speakers [at IMCA conferences], I sometimes wonder how a wirehouse rep could ever implement the ideas," Mr. Lamb said. Topics at the group's meetings include discretionary portfolio management and trust services for clients, he said. But few wirehouse reps can act as discretionary money managers, and brokers are often limited in other services they can offer clients, Mr. Lamb said. The survey found that two-thirds of IMCA members have assets of more than $150 million under management. IMCA members on average handle $125 million, according to a separate analysis by Cerulli Associates Inc. of Boston, up from $108 million 18 months ago. By contrast, the average holder of the certified financial planner designation manages $50 million to $75 million in assets, IMCA said. Only 10% of IMCA members manage less than $50 million, IMCA said. It said its CFP data came from a reader survey conducted by the Journal of Financial Planning, which is published by the Financial Planning Association of Denver. The IMCA survey showed that institutional consultants — originally a key constituency — are no longer heavily represented. Only about 10% of IMCA members focus on institutional consulting. In the survey, 31% of members described themselves as investment consultants for individual investors and 24% as wealth advisers. Wealth advisers provide family-office-type services, in addition to investment consulting, Ms. Pahl said. Dan Jamieson can be reached at [email protected].

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