'Rep-as-adviser' programs on rise

"Rep-as-adviser" programs are gaining interest among brokerage firms as an alternative to the banned fee-based brokerage accounts, according to a report by Cerulli Associates Inc.
APR 14, 2008
By  Bloomberg
"Rep-as-adviser" programs are gaining interest among brokerage firms as an alternative to the banned fee-based brokerage accounts, according to a report by Cerulli Associates Inc. Rep-as-adviser programs are nondiscretionary advisory programs that use a wide range of investment types, Cerulli said in the report. The programs existed before fee-based brokerage accounts were outlawed under a federal appeals court decision in March 2007. The programs have different support requirements compared with fee-based brokerage, "which makes it difficult for sponsors to just repaper client accounts from a non-advisory program to an advisory program," Cerulli reported. Unlike the old fee-based brokerage programs, in rep-as-adviser programs clients need continuous and comprehensive attention from their financial adviser on asset diversification, Cerulli said. "However, the nondiscretionary and flexible nature of these programs makes them the most logical destination for fee-based brokerage clients who wish to continue in a fee-based relationship," the report said. As of the fourth quarter of 2007, the average rep-as-adviser client fee was 1.11%, compared with the average fee-based brokerage account fee of less than 1%, Cerulli said. About 53% of fee-based brokerage programs tracked by Cerulli dissolved as of Sept. 30, with nearly 73% of those assets going into rep-as-adviser programs.

Latest News

Ackerman promoted at Integrated Partners, Robertson Stephens strengthens board
Ackerman promoted at Integrated Partners, Robertson Stephens strengthens board

Some of this week's hires across the wealth and investment industry

Emergency savings dynamic shifts to positive for first time in three years
Emergency savings dynamic shifts to positive for first time in three years

More Americans have added to their savings than depleted them.

Muted week for stocks, bonds amid data, trade, conflicts
Muted week for stocks, bonds amid data, trade, conflicts

Some big headlines have made many investors cautious this week.

Dollar bets disrupted by Trump trade speculation
Dollar bets disrupted by Trump trade speculation

Traders see tariffs mostly as a bargaining tool.

Treasuries set for challenges as tariffs reality nears
Treasuries set for challenges as tariffs reality nears

Yields could rise to 4.80% for the 10-year benchmark, survey suggests.

SPONSORED Record growth: Interval funds emerge as key players in alternative investments

Blue Vault Alts Summit highlights the role of liquidity-focused funds in reshaping advisor strategies

SPONSORED Taylor Matthews on what's behind Farther's rapid growth

From 'no clients' to reshaping wealth management, Farther blends tech and trust to deliver family-office experience at scale.