Contrary to other large wirehouse brokerages, Smith Barney does not plan on aggressively expanding its sales force at this time, according to Sallie Krawcheck, CEO of Smith Barney.
Krawcheck, speaking at the Investment Management Consultants’ Association conference in Boca Raton, Fla., Tuesday, said the firm intends to maintain its current staffing level—currently about 12,500 financial advisors.
The firm, however, does have a similar strategy as other firms—capturing more of the client’s wallet through the use of open architecture, stronger investment research and a diversified product offering.
Sound familiar? Krawcheck thinks so. “I wish I could tell you we’re saying something different—we all say the same thing,” she said in an interview. “However, we are gravitating towards different things. The key difference is that everyone else is looking to hire and recruit aggressively, and we’re looking to invest more in the FCs.”
The firm remains focused on increasing rep productivity, part of the stated goal of having the entire sales force average $1 million in production annually within three years time—known as the “March to a Million” strategy.
“We were saying [a year ago] when we were at $400,000 that we wanted to do this, and I still believe we’ll get there,” she said.
With regard to the firm’s investments in the current workforce, Krawcheck said Smith Barney’s plans include more money directed towards branch manager training, wealth management system platforms and team-based approaches. She declined to get more specific about to the nature of the investments, but there were a few clues in her address to the IMCA members, including her citing of internal firm research that showed productivity for financial advisors doubles when they become part of a team.
Currently, 19 percent of Smith Barney advisors are part of teams, and while more partnerships are being encouraged, they’re not being dictated.
“The idea is to double your business,” said one Smith Barney rep. “We want average production to go from $500,000 to $1 million, but that made it seem like all the pressure was on the lower-end people. That’s the whole part of the focus on teams, though. Their feeling is that if people want to double their business, they have to learn how to focus, specialize and partner with each other to become more efficient and effective.”
A chief focus during the conference was raising the level of competency of investment consultants, who do highly specialized work with affluent clients. Krawcheck emphasized that there isn’t a split in her firm between those who do commission work and those who do consulting-type work. “About 84 percent of consultants have one or two Consulting Group relationships,” she said. “Is there still opportunity? Sure—we’d like to see 90 percent doing this business next year. But we absolutely don’t have two separate sales forces.”
