AllianceBernstein looking to add financial advisers this year

AllianceBernstein Holding LP demonstrated enough progress in some businesses last year that the company plans to add advisers in 2010 and may buy smaller complementary firms, executives said late Thursday during an earnings conference call.
JUL 26, 2010
AllianceBernstein Holding LP demonstrated enough progress in some businesses last year that the company plans to add advisers in 2010 and may buy smaller complementary firms, executives said late Thursday during an earnings conference call. Though the unit of French insurer Axa SA recorded $16.8 billion in net outflows last quarter, primarily on the institutional side, profits rose. The company also enjoyed improved performance in some of its proprietary investment products, such as growth, value, and products that are a blend of the two. Its fixed-income product line, which AllianceBernstein revved up a couple of years ago, was an especially bright spot, outperforming benchmarks by at least 5% for all of 2009. The firm also saw $800 million in private-client assets go out the door last quarter. The goal now for AllianceBernstein's private-client business is to try to appeal to wealthier potential customers by offering a broader array of products and services. To that end, the firm is launching a “dynamic asset allocation” product, which will allow clients to adjust to fluctuations in the markets. In addition, the company this year plans to introduce an inflation protection platform and a commercial-real-estate service. David Steyn, chief operating officer at AllianceBernstein, also pointed out that that the company's wealth-forecasting-analysis product, which is used with prospective clients to analyze existing wealth, philanthropy, spending patterns, etc., is doing well. “We saw the amount of wealth-forecasting analysis, significantly, materially increase” last year, Mr. Steyn said, particularly in the second half. Because wealth-forecasting analysis is a driver for sales, he added, it's a “good indicator of future activity.” He did not provide any numbers on wealth-forecasting analysis, however. AllianceBernstein ended the year with 292 financial advisers, and this year, that number is expected to increase, Mr. Steyn said. “We've never in the past given targets for what our financial adviser numbers will be, but I think looking out over 2010, it's reasonable to assume a high-single-digit [percent] growth in financial advisers across the U.S., reflecting the opportunity we see here,” Mr. Steyn said. Peter S. Kraus, who took over as chief executive from Lewis A. Sanders after AllianceBernstein lost half its assets in 2008, noted on the call that mergers and acquisitions will also likely be part of the story. “We continue to believe that there may be opportunities for us in the M&A markets,” Mr. Kraus said, “but they are going to be places where we don't have a service or there's a substantial consolidation opportunity.” The firm will also avoid deals with large organizations, he said. “To acquire something that would effectively require us to merge into that culture is challenging,” said Mr. Kraus, former head of strategy at The Goldman Sachs Group Inc. “Look for us to be opportunistic where we think we can be, because that can happen, for sure, but it's going to be characterized by places where we're not, or financially attractive transactions that add scale.” Though AllianceBernstein is now paying its employees markedly less than it did before the financial crisis, with total base salary per quarter trending at about $100 million, overall cash incentive compensation totaled $58 million last quarter. “We will pay our people pretty much in line with the way revenues grow,” Mr. Kraus said on the call, in response to a question. “We are looking to pay our people who we think are the best — the best.”

Latest News

WealthReach, VastAdvisor tie-up takes aim at advisors' cold outreach problem
WealthReach, VastAdvisor tie-up takes aim at advisors' cold outreach problem

Partnership pairs organic lead detection with paid ad targeting to help end "spray-and-pray" marketing for growth-seeking advisory firms.

LPL taps Wells Fargo vet as new chief technology and information officer
LPL taps Wells Fargo vet as new chief technology and information officer

Jonathan Lewis joins the wealth management giant as it proceeds with a $2 billion AI and technology push for advisors.

LPL Financial lands $1.6B Conte Wealth Advisors from Cambridge
LPL Financial lands $1.6B Conte Wealth Advisors from Cambridge

A third-generation Pennsylvania firm with 24 advisors and $1.6 billion in client assets has left Cambridge Investment Research.

Confluence Financial Partners secures minority stake from PE firm
Confluence Financial Partners secures minority stake from PE firm

Fast-growing $7.6 billion Pittsburgh-based RIA secures growth capital but retains full management control.

US bank M&A wave set to reshape wealth management landscape
US bank M&A wave set to reshape wealth management landscape

Bain projects up to seven US trillion-dollar banks by 2030 as consolidation accelerates.

SPONSORED Direct indexing webinar targets tax-loss harvesting amid market swings

Northern Trust’s Ken Lassner shows advisors how to convert volatility into after-tax portfolio gains

SPONSORED Who builds the income when the pension disappears?

Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income