For Advisors, 2003 Was a Better YearFor Advisors, 2003 Was a Better Year

Will Leitch

The fortunes of advisors took a turn for the better in 2003, according to the annual report from the Securities Industry Association.

For starters, average gross commissions and fees were up to $372,963, a 4.2 percent rise from 2002, though still lower than the $485,478 of 2000. Average earnings logged in at $153,182, up 1.6 percent from last year, and the average payout rate was 36.5 percent.

“We saw a modest improvement across the board,” says Steve Carlson, SIA vice president and director of surveys. “It was the first year since 2000 that we saw an uptick in production and a downturn in turnover. The results were positive, and not entirely unexpected.”

Fee-based arrangements in 2003 accounted for 31 percent of the average rep's business, compared with 28.4 percent in 2002. In 1995, the share was around 8 percent, and the steady increases speak to the brokerage industry's continued interest in holistic advisory services.

“The upward trend in the share of a registered rep's business derived from fee-based accounts demonstrates the ways in which brokers' interests are aligned with individual investors' interests,” says Carlson.

There were also improvements in the area of broker turnover. According to the report, 19.3 percent of advisors left their firms in 2003 — an improvement from the year before when 20.8 percent did so.

The SIA report, which has been published every year since 1973, is based on interviews at 36 broker/dealers, which together employ 44,000 reps.