A Unique Opportunity for B-D Managers and Principals

For branch managers and executives of smaller broker-dealers who seek independence and business growth, the Super Branch model represents an increasingly popular choice.

Several characteristics of Super Branches, also known as large Offices of Supervisory Jurisdiction, make them a desirable choice for entrepreneurial firm leaders in today’s highly regulated and competitive environment.

Here are three reasons the model has proved rewarding for growth-oriented managers:

It provides entrepreneurial freedom suited to today’s environment. In the past, many advisors who wanted to build their own business organization would eventually form a broker-dealer. Today, the economics of creating and operating a broker-dealer are such that only large-scale organizations can successfully meet the technology, compliance and other operating challenges. For those entrepreneurial managers, the Super Branch model is a structure designed for today’s business environment.

Scott Bordelon, president of Financial & Investment Management Advisors, Inc., a Super Branch in Covington, La., affiliated with Securities America, said at one point in his career he created his own organization because he liked to build things. His business now supervises more than 100 affiliated advisors whose focus is long-term financial planning and investing.

As head of his own enterprise, Bordelon has come to value the efficiency-enhancing aspects of technology and is investing in software to convert to paperless operations, as well as working on a robo solution for the RIA portion of his business. He thinks of his Super Branch as its own mini broker-dealer, which would be impossible to operate these days because of the scale necessary to be viable.

You can develop a unique corporate culture. Many long-time advisors and managers spent their formative years at smaller broker-dealers where close-knit relationships and strong corporate cultures were formed. Many say the career satisfaction that came from those relationships and cultures is often missing in today’s larger corporate structures.

Those who have formed Super Branches have re-created the small-firm culture they miss — a fact confirmed by advisors who have affiliated with Super Branches because they prefer to work in a supportive environment with a unique culture while leveraging the resources and strength of the broker-dealer.

Jack Connealy, president of JFC Financial Services, a Super Branch in Lincoln, Neb., affiliated with Securities America, said the team spirit at his organization translates into better service for advisors since problems can be addressed quickly by his knowledgeable staff. That, in turn, leads to greater advisor satisfaction and lower turnover.

Super Branches provide a better base for business growth and profitability. Since adding affiliated advisors is the key to growth in the retail securities business, the economics of the Super Branch model — in which the costs of operations and technology are borne largely by the affiliated broker-dealer — make it an attractive home for advisors seeking independence and support. The recruitment story a Super Branch principal can tell advisors, said Christopher Holloway, president and CEO of Suffolk, Va.-based Investors Securities Group Inc., which is affiliated with Securities America, is “more interesting than the small broker-dealer story.”

As their reputation grows for being a partner of choice, many Super Branches are finding that advisors seek them out. L&M Financial, a Super Branch in Amherst, N.Y., affiliated with Securities America, has developed a reputation across upstate New York as a well-managed organization that provides its affiliated advisors with a full range of business services. Amy S. Lipsitz, the firm’s CEO, said her organization has developed expertise in succession planning and provides financing for advisors who want to buy the practices of advisors wishing to retire. As that service has become known, Lipsitz has received inquiries from advisors wishing to affiliate so they can avail themselves of her firm’s succession services — which adds to L&M’s assets under management and revenues.

Growth in assets and revenue translates into greater profits for Super Branch principals, who will acknowledge the rewards don’t come instantly and can take time to see. Many say scale is the key to a successful Super Branch operation. And to build the scale necessary to become a successful Super Branch, three factors are critical:

1. Entrepreneurial drive: Successful Super Branch leaders seem to have had an entrepreneurial bent from their earliest professional days. Some were even running advisory or other businesses before they had clients of their own. Successful Super Branches are run by leaders who want to create advisory businesses that will last with or without them at the helm.
2. Leadership skills: Unlike entrepreneurial drive, leadership can be learned. Successful Super Branch leaders are constantly working on the skills they need to do a better job of leading and nurturing talent, as well as overseeing operations and other aspects of their business. And while many Super Branch leaders may not find their operational and process responsibilities the most rewarding part of their daily workflow, they get satisfaction from managing the administrative component of management and appreciate its contribution to the success of their business.
3. Retaining and developing skilled advisors: Growth through the addition and retention of new advisory talent is the third dimension of building a successful Super Branch. Effective Super Branches are skilled recruiters. Their story is inherently appealing, because they can present an attractive value proposition, offer the support and teamwork advisors need to grow, and provide an opportunity to build wealth through the sale or transition of a rep’s practice. Because they are good managers and can delegate many administrative duties, the best Super Branch leaders can spend most of their time attracting and developing talent.

Large broker-dealers, including Securities America, have programs to help Super Branch leaders in every way. Securities America’s Branch Builder Guide, for example, provides Super Branch leaders with an understanding of their supervisory duties and gives an accurate assessment of their strengths as a manager and leader. The Guide helps them develop a clear and concise proposition for their business, along with a service and support model for their advisors.

The Guide also offers a program to help Super Branches with recruiting, including how to develop a recruiting budget and a plan to attract and recruit advisors who will fit branch goals. It also has proven marketing techniques for recruiting and access to tools to help with a successful transition.

For an increasing number of entrepreneurial brokerage firm managers, the Super Branch model is becoming today’s best fit.

To learn more about this business model, download “Inside the super branch model: Why it works for managers and advisors.”