The transition support received when an adviser moves to a new broker-dealer tops the list of improvements registered reps want from their independent broker-dealer, according to the results of a new survey.
Conducted by VVV Research and Development Inc. for Cambridge Investment Research Inc., the national survey asked 648 representatives about their experience with their broker-dealers. As part of the survey, financial advisers listed areas in which broker-dealers need to improve. Here are the top 10:
1. Transition support
This tops the list, industry recruiters said, because advisers can lose lots of money — and clients — if a change-over isn't accomplished smoothly.
“If there are any glitches, problems, or if the broker-dealer isn't being responsive or not handling errors, it can totally devastate a broker's book,” said Larry Papike, president of Cross-Search, a recruiting firm for independent representatives and executives. “Having a reliable team of people that reps can count on is important to them.”
2. Payout/costs
While payouts are a huge issue, Mr. Papike pointed out that sometimes advisers forget that there may be hidden costs.
“They don't realize there's no free lunch,” he said. “The broker-dealer has to make money or they won't stay in business. Advisers view payout as really important, but when you break it down, I'm guessing that the top 10 broker-dealers are all within one or two points.
3. Marketing solutions
Advisers want help with marketing and client acquisition, said Kyle Selberg, senior vice president of business development for Cambridge Investment Research.
“In a market downturn, this becomes even more critical to an adviser to help them get their revenue back to where they can make ends meet for their practice,” he said.
4. Complexity of technology
Industry recruiting leaders maintain that when advisers are thinking of making a move to a new firm, they prefer to go somewhere with technology they know will be easy for them to use.
5. Overall technology
Even though broker-dealers have improved their technology capabilities greatly, there are still some that aren't providing advisers with the resources that they would like, Mr. Papike said.
“Many firms say they're great on technology but haven't devoted a lot of resources to it,” he said. “The top 10 broker-dealers have thrown a lot of money into technology.”
6. Software applications
Reps often want to go to broker-dealers that have
financial planning software they have used before.
“They want labor-saving stuff,” said Mitch Vigeveno, founder of Turning Point Inc., a recruiting firm.
7. Responsiveness
Advisers want a broker-dealer that will answer questions and concerns quickly, said Mr. Vigeveno, noting that advisers get annoyed when they don't feel they are getting a response to their problems in a timely fashion.
“Some broker-dealers have gone to an inquiry-tracking system so that a rep can submit an inquiry about an issue, which then can be tracked by anyone to check its status,” he said.
8. Imaging capabilities
Advisers are becoming more interested in going paperless, and they want help with the process, said Kyle Selberg, senior vice president of business development for Cambridge Investment Research.
“Some advisers tell us they have the equivalent of two- to three-rep offices dedicated to filing cabinets,” he said. “If they can go paperless, they can bring other advisers into their group, and that's huge for advisers.”
9. Basic operations
Advisers want broker-dealers that can complete transactions without mistakes. If there is a mistake, they want the firm to correct it quickly, Mr. Selberg said.
“Mistakes happen everywhere,” he said. “Where firms can differentiate themselves is by having an effective process for getting things resolved quickly and by jumping on any mistake that happens.”
10. Reliability
Broker-dealers often have internal turnover, which can leave advisers unsure of to whom to turn for help, Mr. Papike said.
“Having a reliable team of people there that reps can count on is important to them,” he said.
E-mail Lisa Shidler at [email protected].
