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The purity of the all-independent crowd was palpable, powerful for attendees
April 26, 2010 — 5:15 AM UTC by Brooke Southall
Brooke’s Note: A friend of mine recently moved from Sausalito, Calif., to Los Angeles because she saw greater diversity, culture, job opportunities and energy. But Sharon is already planning to move back because of a factor she had not foreseen as being all that important. She can’t locate any downtown in la-la land. Within 10 miles of her former home were the downtowns of Mill Valley, Tiburon, Larkspur and San Anselmo. These are places you can have a mocha and feel like you have reached the heart of a community — albeit a more homogeneous one. I thought of how important that sense of community is as I wrote this article about why RIAs and RIA custody executives are so effusive about a conference that happened a little over a week ago in Orlando.
RIAs have a plethora of great industry conferences to choose from each year, hosted by custodians like TD Ameritrade Institutional and Schwab Advisor Services — or by organizations like IMCA, NAPFA and the FPA.
But while events these groups hold around the United States address a variety of needs for these advisors, their common denominator is the service the groups provide and not the advisors themselves.
It’s because the Barron’s Top 100 Independent Advisors conference did focus on advisors and the sense of solidarity among them that several RIA leaders and advisors are already giving raves to the freshly-hatched event held April 14-16 in Orlando’s Ritz-Carlton.
RIAs become an industry
Bernie Clark, executive vice president and head of Schwab Advisor Services, says that the elite event demonstrated to him the degree to which the RIA business has begun to coalesce.
“This really has become an industry,” he says. “It was akin to me to going to a big SIA conference to the wirehouses. Everything’s there. It’s neat to have that experience.
“This is the one conference that is pure independent advisor and it’s smaller” than most national events, says Tom Bradley, president of TD Ameritrade Institutional.
There were 73 of the top 100 Barron’s independent advisors in attendance and other advisors that swelled attendance to a few hundred. Advisors who are chosen in previous years are permitted to attend the event in addition to current honorees.
Independence was a theme and a bond at the Barron’s conference, according to Bob Collins, principal of Collins Investment Group. He previously attended conferences held by Barron’s but aimed at wirehouse advisors.
“There such a difference between the wirehouse one a year ago and this one,”’ he says. “It was definitely calmer. There isn’t a lot of chest pounding. We all know we’re business owners.”
Mike Durbin, who heads up Fidelity Institutional Wealth Services, said the conference was “doing its part to provide an identity to the industry and there was a lot of positive buzz on that score.”
If there’s a downside to the event, it’s that advisors can only attend if they’re invited. One important factor is having a large amount of assets under management but there are other qualitative factors. For more insight, read: The top 10 things you need to know about the new Barron’s Top 100 list and Barron’s offers insight but declines interview about Top 100 study
Advisors who get the Barron’s nod need to pay their own way to Orlando and pick up the cost of the Ritz-Carlton rooms, but it was worth it for Collins, who recently broke away to Wells Fargo’s Finet program. for more details on his breakaway, see: Wells Fargo emerges as independent channel competitor
“I’m willing to pay to do this,” he says. “It’s the cream of the crop, and I took away some ideas. It confirmed that I’m doing everything right” in running an independent business.
The three major custodians were all sponsors of the conference, and the leader of each gave speeches. A laser focus on feasting on wirehouse assets created solidarity in Orlando – even among fierce custodial competitors, according to Bradley.
Big pot of gold
“The bottom line is that most of the business comes from the wirehouses,” he says. “The big pot of gold is the wirehouses.”
Yet for all of its celebratory qualities, the conference also underscored to Durbin just how stiff the challenges remain to get the RIA industry over the hump. “I absolutely ascribe to the shift [to an advisory world dominated by independents] but it’s not going to be easy.”
Durbin hints at a new program at Fidelity for stimulating the movement of assets from wirehouses to independent advisors. The plan is to take all the knowledge of how wirehouses compete accumulated at Fidelity’s corporate level – in the name of recruiting breakaway brokers — and confer it on RIAs. Armed with this intelligence, Durbin believes that RIAs will be more successful in luring assets away from them at the client level. That knowledge can include information about trading, reporting, pricing and website functionality.
Clark adds that he believes that Cerulli’s assertion that the size of the independent business will approach the size of the full service business by the end of 2012 looks well within grasp.
Trend is slowing?
“People like Sallie Krawcheck get to say this [trend to independence] is slowing,” he says. “It’s not within her sights.”
With such a big target drawn on its back, the wirehouses may still have one more can’t-beat’em-so-join’em card to play in competing with independent advisors, Clark says.
“In 2015, the wirehouses are going to declare themselves independent,” he says.
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Top Executive: Tom Nally
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