President and CEO, First Allied Securities Inc.
Headquarters: San Diego, Calif.
Number of producing advisors: 840
Total firm AUM: $24.4 billion
1. What makes your firm different?
First Allied has distinguished itself within ouras the firm with a proven program to grow independent advisors’ businesses to be more financially successful and professionally rewarding. We invest heavily to educate advisors and help them optimize and monetize their businesses, building lasting personal relationships based upon trust, service and our mutual success.
The way we support the value proposition that drives same-store growth is by providing subject-matter experts or intellectual capital that supports the advisor at the point of sale so that they can capture business that they ordinarily wouldn’t have been able to capture.
2. Which regulations are the most burdensome or counter-productive to your business?
While regulations are generally well intended, in many instances by the time they are implemented, they are substantially ineffective. They are “looking in the rear-view mirror,” so to speak. In general, the cumulative effect of new regulations (as a result of legislation, enforcement or otherwise) is the most burdensome. New regulations seemingly enter our business daily with little or no retraction of similar rules that may already be in place to address the same issue. The “benefit” in the old-fashioned “cost-benefit analysis” seems to have been misplaced.
The rules are coming out at such a pace that most firms don’t have an opportunity to really step back and think about a holistic approach to managing risk in a client’s portfolio. So they’re adding process on top of process on top of process that seeks to establish a bright-line test for what is often a subjective rule. You take something like suitability—that’s a subjective rule, and it’s hard to really have bright-line tests that are absolute every single time.
3. In an environment whereis tough, how do you go about doing it successfully?
By providing a tangible value proposition that educates advisors of the fundamental difference in the way most firms view their relationship with an advisor from a vendor-customer relationship to a partner-partner relationship. Ultimately, in the absence of tangible value, advisors will always look for the best economic deal, which in the long run presents sustainability.
4. What issues are affecting your client base most significantly these days?
Probably the same issues that are on the minds of every American: the macro-economic issues facing us are significant and lead to volatility and instability (i.e., Europe, fiscal cliff, trade deficit). Investor confidence, and in many instances even advisor confidence, need to be restored.
5. What do you think is the next shoe to drop on the independent space?
Continued margin compression remains a real concern. On one hand, the cost of advisor acquisition, compliance andcontinues to rise. At the same time, revenues are under pressure due to low interest rates, limited sources of other revenues and a general lower end-client advisory fee. Scale points continue to rise rapidly, which will likely drive further industry consolidation or unplanned exits from our industry.