Financial advisors appear to be shaking off the pain of the bear market that ended last month, as financial results released Wednesday after the close by Ameriprise Financial Inc. indicate; the firm's 10,274 financial advisors saw a year-over-year increase of 7.4% in productivity as measured by revenue, a sign of advisors' resiliency after 2022 saw the S&P 500 stock index fall by 18%.
Ameriprise Financial reported adjusted operating net revenue per financial advisor of $874,000 at the end of June, compared to $814,000 a year earlier, an increase of 7.4%. That's a 3.2% increase from March, when Ameriprise reported net revenue per advisor of $847,000.
Terms such as "revenue per advisor" at brokerage firms like Ameriprise are synonyms for "gross dealer concession," industry shorthand meaning the total fees and commissions an advisor generates from clients in a 12-month period. Financial advisors who are employees typically keep 40 cents per dollar of revenue, with the firm taking the rest; those who are independent contractors typically keep in the neighborhood of 80 cents per dollar of revenue.
Ameriprise has 2,108 employee financial advisors and 8,166 so-called franchise advisors, who work as independent contractors. Not all firms report average revenue per advisor.
Over the first half of the year, the S&P 500 stock index was up more than 15%, so the bump in revenue per advisor was both to be expected and welcome, one industry recruiter noted.
"With hindsight, the bear market made clients appreciate their financial advisors more, and firms that are pure wealth management operations reflect that," said Danny Sarch. "The best financial advisors do a good job of talking their clients off the edge when the market hits the skids."
"Covid was terrible, of course, but its aftermath, including inflation and the fear of a recession, was easy to explain to clients as to why the stock market was so bad last year," said Sarch, president of Leitner Sarch Consultants. "My experience is that bull markets make people think that they can invest on their own and do it themselves, and bad markets make clients realize they need their financial advisors."
Ameriprise ended June with 10,274 financial advisors compared to 10,245 a year earlier, essentially flat. It hired and recruited 99 new financial advisors to its platform in the three months ending in June.
The advice and wealth management business unit at Ameriprise reported adjusted operating net revenues of $2.34 billion for the quarter, an increase of 14% when compared to the same period last year. Advice and wealth management's pretax adjusted operating earnings for the quarter saw an increase of 49% when compared to a year ago, reaching $731 million.
Firms continue their quest to attract and retain the best advisor teams.
A survey from TacticalMind AI found 69% of advisors say a high-quality AI platform that makes investment recommendations and constructs portfolios is worth $500 monthly, while research-only tools are valued closer to $250.
The alts tech provider's latest integration lets advisors query fund data and surface portfolio insights without leaving their primary workspace.
The regulator is scrutinizing how some firms oversee concentrated positions in complex "worst-of" notes – and wants answers.
Meanwhile, Carson Group fully integrates a decades-old practice in Phoenix, Arizona, and Triad Wealth touts its 5x growth to hit a $2 billion milestone.
As technical expertise becomes increasingly commoditized, advisors who can integrate strategy, relationships, and specialized expertise into a cohesive client experience will define the next era of wealth management
Growth may get the headlines, but in my experience, longevity is earned through structure, culture, and discipline
