NEW DIVISION

THE CREATION & IMPLEMENTATION

SUMMARY

• New Division: Wealth Management/ Financial Services
• Objective: The Creation and Implementation of a scalable Wealth Management Search Division
• Players - Where Advisors do business
• What’s the current Landscape?
• Leaders
• The Target
• Economics

PLAYERS- BY CATAGORY

• Wirehouse/ Banks
• Full Service, National & Regional (employee)
• Independent Broker Dealer (1099)
• Full Service & IBD - Choice
• Insurance (NW Mutual)
• Registered Investment Advisor (RIA)
• Custodian (Schwab, TD, Fidelity)

FINANCIAL ADVISORS

• They’re are an estimated 500,000 licensed financial Advisors in the U.S.
• Around 82K of them are CFP’s - around 15% of all U.S. HH’s have a Financial Plan
• Nearly 50% of all advisors are over 55 years old
• Financial Planning is not a career where you retire once you’re eligible for Medicare or SS
• Advisor’s with 30yrs of experience usually bring in $400K/ yr in personal income
• Retirement wave is taking longer than anticipating - Tech & Robo not a threat, it’s actually helping Planning focused advisors

CONT’D

• (CFP) reach underserved or rural markets, increasing the demand for financial advice in the long run
• Number of FA’s is up over the past 5 years despite the anticipated wave of retirees & rise of robo advisors
• Millennials are reluctant to join, they see it as sales and a long road. They’re Right
• Career Changers- Second Career Advisors are becoming more common. Typically a successful entrapenuer or Sr. Manager/ Executive Attorneys or Accountants. Great money, they have the people skills and Rolodex. Over lapping business.

Untitled Slide

• As of Aug, 2019 there are a reported 3,600 Broker Dealers in the U.S. as reported by FINRA

LEADERS OUTSIDE OF WIREHOUSES

• LPL - Revenue: $5.6BB - AUM: $628BB- Advisors: 16,000+ Purely Indy
• Ameriprise Financial Services (60% Indy) Revenue: $12BB - AUM: $897BB Advisors: 10,000
• Raymond James (RJFS/RJA) Revenue: $2.4BB - AUM: $327BB - Advisors: 7,600
• They’re all Self Clearing

TARGET- PRIVATE EQUITY IB/D

• Advisor Group - Just purchased Ladenburg Thalmann now combined with 9 Broker Dealers - 11,400 advisors and ability to use 3rd party clearing

TARGET- PRIVATELY HELD IB/D

• Cambridge Investment Research - est. 1985 Currently on a recruitment rampage
• Privately held and offer multiple cleaning choices.
• Revenue: $906MM - AUM: $95B - Advisors: 4,155 - Franchises: 2,261 - Retail Offices: 2,290

TARGET

• CommonWealth Financial Network -est 1950
• Hybrid/RIA
• Using one Clearing Service - FCCS
• Revenue: $1.4BB - AUM: $161MM - Advisors: 2,258
• Recognized 41 times as a best place to work by 5 top publications

ECONOMICS

• Recruiters are paid a % of a producing advisor’s VERIFIABLE Trailing 12 Month Production, or GDC (Gross Dealer Commission) though production reports, earnings statement or asset breakdown.
• The client will comeback with an offer to the advisor based on that 12 month LOOK BACK of GDC. If the offer is accepted we are paid our % of that GDC, Once the advisor is registered and usually net 20.

CONT’D

• Large IB/Ds usually start recruiters at 6% of T12 - GDC
• Possible Scale: $0-2.5MM GDC = (6 to 8 %) $2.5- 5MM GDC = (8 to 10%)- in a fiscal year of recruiting.
• Example: $1MM GDC Producer/ Advisor accepts a deal - The recruitment Agency is at 6% = $60K fee and now has another $1.5MM in GDC to place before a raise (8%)

SHOPPING

• Spotlighting Candidates MBA, JD, MS Financial Planning/ CFP, AIF, CDFA)
• Response rate from prospective CLIENTS are multiplied when introducing a Female CFP
• Target clients are RIA and Hybrid/RIAs
• Fee/Agreement - 10% of Trailing 12 Production, 25% of candidates guaranteed first year income (Salary/Bonus) or a flat fee of $20K, whichever’s greater.

DISCOVERY DATA

Untitled Slide

• First week- Establish contact, relationship and recruitment potential for AdvisorGroup, Commonwealth and Cambridge. (IB/D) -Build out custom CRM look, understand the capacity of CRM/Tech.
• Two Shop Candidates Monthly - LinkedIn Campaigns into “ONO” with CFP or AIF and CRPC. Partner with the candidates, pull the data on suitable firms in given market and email campaign. This is the quickest way to build revenue.
• In between Shops- Cold call to specific markets for the IB/D- 400-600 alls per week.

Untitled Slide

Untitled Slide