For many product providers and distributors, advisors affiliated with Independent broker dealers are increasingly important given the growth and activity of this distinct audience. Independent BD Advisors are a unique segment with characteristics and behaviors that make them unlike more traditional wirehouse advisors and pure RIAs. Practical Perspectives has previously highlighted many of the different preferences and behaviors of IBD advisors as part of our proprietary research covering a wide range of strategic and marketing/sales subjects. In this new 118-page report, we leverage several of our recent in-depth studies to provide an updated and detailed examination of IBD advisors. Our goal is to offer insights and implications related to several strategic and tactical aspects of working with Independent BD advisors including:
· How the role of Independent BD advisors is changing and the risks and challenges they face going forward
· How Independent BD advisors build client portfolios and their changing use of diverse types of investment vehicles
· The receptivity of Independent BD advisors to wholesalers and the wholesaling approaches these advisors find most useful
· The use of insurance and annuities among Independent BD advisors and how insurers can deliver more effective support
· The forms of marketing outreach and value add assistance most useful to Independent BD advisors
· How product providers and distributors can engage with IBD advisors through digital and web-based capabilities
Key Topic Areas
How Independent BD Advisors Manage Client Portfolios
· What sources influence investment decision-making and how relevant are model portfolios and style boxes?
· Which investment vehicles are preferred in building portfolios?
· How is use of active vs. passive investment management changing and for which categories are active solutions in demand?
Independent BD Advisors Use of Annuities and Insurance
· How engaged are IBD advisors in offering insurance and annuities and which categories of products are most relevant?
· What are the key challenges to greater use of insurance and annuities?
· What enhancements and types of support are most important to increase use of annuities and insurance solutions?
Marketing Outreach to Independent BD Advisors
· How much consideration is given to marketing outreach and from which sources?
· What are the characteristics of marketing outreach and value add support that have the most impact on IBD advisors?
· What types of value add and practice management support are most useful?
Independent BD Advisors Use of Digital and Web Support
· What specific actions are IBD advisors most likely to perform using product provider web and digital support?
· What are the characteristics of the most useful digital and web support?
· How engaged are IBD advisors in using social media and what key benefits do they perceive from using these capabilities?
Wholesalers Engaging with Independent BD Advisors
· On which aspects of IBD advisors’ behavior does wholesaling have most impact?
· To what extent are technology-based approaches replacing traditional in-person wholesaling?
· What characteristics define the most useful wholesaling and what forms are most likely to drive action of IBD advisors?
To Order the Report
The study is available in PDF format for the subscription price of $4,950 which includes a discussion of key findings. To order the complete 118- page, 97 exhibit report or for more information, please contact:
Howard Schneider at 978-590-7290
or email howard.schneider@practicalperspectives.com
Introduction and Methodology
Independent broker dealer advisors are a critical audience for asset managers, insurance companies, custodians, and other service providers that rely on intermediary distribution. These entrepreneurial advisors comprise the largest proportion of active retail practitioners and represent a growing share of total industry assets. Independent BD advisors have special characteristics and needs that make them receptive to engaging with product providers such as mutual funds and insurance firms. Despite recent enhancements at large independent broker dealers, many Independent BD advisors lag their wirehouse counterparts in access to technology, tools, and home office support. Compared to RIAs, most Independent BD advisors focus on mass affluent clients rather than on high net worth or ultra-high net worth relationships. In past studies, Practical Perspectives has highlighted many of the different viewpoints and perspectives of Independent BD advisors as part of our proprietary research covering a range of topics relevant and critical to strategic and marketing/sales subjects. In this new report, we build on prior studies we have conducted to share a detailed examination of advisors at independent broker dealers such as LPL Financial, Ameriprise, Commonwealth, Raymond James, and a host of other firms. Our goal is to provide product providers and distributors with insights and implications related to several strategic and tactical questions involving these advisors including:
· How is the role of Independent BD advisors changing and what do they envision as the most significant challenges and needs for support going forward?
· How can providers align with key trends in how Independent BD advisors manage portfolios, including their use of both active and passive solutions?
· How should wholesalers engage with Independent BD advisors including preferences for interaction and how these advisors define the most useful wholesaling support?
· How do Independent BD advisors use insurance and annuity solutions in their practices and how can providers better serve the distinct needs of these advisors?
· What are the most effective marketing outreach and value add support strategies providers can employ to develop and build relationships with Independent BD advisors?
· How can digital and web-based capabilities be used to more effectively engage and serve Independent BD advisors?
The singular focus of this report provides additional in-depth perspective that can enhance the sales, business development, product development, marketing, and support offered to Independent BD advisors. Our research has consistently underscored several differentiating characteristics and behaviors of Independent BD advisors including:
· Highly experienced with majority having 20+ years of industry experience
· A greater focus on mass affluent clients, with average account balances significantly lower than other advisors, and less likelihood of serving investors with $1 million or more in assets
· Higher propensity to function as a solo practitioner or in a smaller team practice
· Moderate technology sophistication and usage, with openness to using digital tools but often lacking access to newer technologies
· Focus on providing a variety of services to clients that go beyond investment management to include activities such as holistic planning
· Far greater engagement and use of insurance solutions, especially annuities
· Greater comfort with traditional marketing and sales efforts, especially wholesaling
· High reliance on packaged investment vehicles especially actively managed mutual funds and variable annuities
· Significant desire for additional support from product providers and platforms across a range of practice management related topics to help operate more efficiently and scale their practices
· Confidence in their ability to meet the needs of existing and prospective clients
Throughout the report, Independent BD advisors are compared to other broker dealer advisors and RIAs as a point of reference and differentiation. These include advisors affiliated with from wirehouse, regional, and national employer-based broker-dealers (Full Service) and those that are pure independent fiduciary RIAs. Notably, many advisors in the Independent broker dealer channel are dually registered and do both fee-based and brokerage business, as appropriate. Virtually all Independent BD advisors are also insurance licensed and assist clients with life, long-term care, or annuity needs arising from risk protection or income planning. In reviewing this report, note that all data presented is sourced through proprietary research published in the past 18 months.
Table of Contents
Section I: Executive Summary
Section II: Introduction and Methodology
Section III: The Changing Role of Independent Broker Dealer Advisors
A. How do Independent BD advisors typically position their support to clients and prospects?
B. How well prepared are Independent BD advisors to serve existing and prospective clients?
C. What do Independent BD advisors perceive as the key challenges and risks to meeting client needs going forward?
D. What aspects of their practice do Independent BD advisors view as most crucial for additional support going forward?
E. Who do Independent BD advisors expect will be their primary client going forward?
F. How do Independent BD advisors expect their practice will change going forward?
G. When do Independent BD advisors expect to no longer be active full-time advisors?
Section IV: How Independent Broker Dealer Advisors Construct Portfolios
A. To what extent is investment management a primary focus for Independent BD advisors?
B. How do Independent BD advisors typically construct portfolios and how responsible are they for portfolio construction decisions?
C. Which third party sources have greatest influence on how Independent BD advisors construct portfolios?
D. How do Independent BD advisors use model portfolios to guide investment decisions?
E. How important are style boxes to how Independent BD advisors build portfolios?
F. How widespread is the use of fee-based solutions and which types of advisory solutions are most often used by Independent BD advisors?
G. To what extent do Independent BD advisors rely on actively and passively managed solutions and how has this been changing?
H. What are the key challenges for Independent BD advisors in using actively managed solutions?
I. How do Independent BD advisors perceive actively managed solutions relative to passively managed solutions?
J. What factors influence Independent BD advisors when selecting specific actively managed solutions?
K. For which equity and fixed income categories do Independent BD advisors prefer active and passive solutions?
L. What forms of support from product providers related to portfolio construction are most important to Independent BD advisors?
M. What changes or enhancements would have the most impact on Independent BD advisors use of actively managed solutions?
Section V: Independent Broker Dealer Advisors Use of Annuities and Other Insurance Solutions
A. How significant a priority is it for Independent BD advisors to offer or recommend insurance solutions to clients?
B. How widely do Independent BD advisors use insurance solutions?
C. How significant are insurance related revenues to Independent BD advisors?
D. To what extent do Independent BD advisors have access to insurance providers and solutions and how many do they typically use?
E. Which key categories of insurance solutions do Independent BD advisors use most?
F. What are the key challenges for Independent BD advisors in considering and using insurance solutions?
G. What are the main drivers for Independent BD advisors in offering or recommending insurance solutions to clients?
H. What sources do Independent BD advisors rely on most for support in selecting the insurance products they offer or recommend?
I. How do clients typically access insurance solutions offered or recommended by Independent BD advisors?
J. What are the characteristics of insurance providers that Independent BD advisors are most likely to offer or recommend to clients?
K. Which aspects of support from insurance providers are most important to Independent BD advisors?
L. What changes would improve Independent BD advisors satisfaction with insurance providers and solutions?
Section VI: Independent Broker Dealer Advisors Engaging with Wholesalers
A. How valuable is wholesaling to Independent BD advisors and how willing are they to engage with wholesalers?
B. How many contacts from wholesalers do Independent BD advisors receive and how do they perceive the volume of contact from key sources?
C. What are the most typical forms of wholesaling outreach directed to Independent BD advisors?
D. On which aspects of Independent BD advisors behavior do wholesalers have the most significant impact?
E. What do Independent BD advisors consider wholesalers do best?
F. How have Independent BD advisors interactions with wholesalers changed in the past year?
G. Do Independent BD advisors prefer a specialist wholesaler or a generalist approach to wholesaling?
H. Is effective wholesaling outreach to Independent BD advisors related to the firm or the individual wholesaler?
I. To what extent are technology-based approaches to wholesaling supplanting in-person contacts for Independent BD advisors and how receptive are they to these approaches?
J. What characteristics define the most useful wholesalers for Independent BD advisors?
K. What changes would increase the usefulness and impact of wholesaling to Independent BD advisors?
L. Which forms of wholesaling outreach are most likely to cause Independent BD advisors to take subsequent action?
M. What specific actions do Independent BD advisors typically take through interactions with wholesalers?
Section VII: Marketing to Independent BD Advisors
A. How much consideration do Independent BD advisors give to marketing outreach?
B. How likely are Independent BD advisors to pay attention to marketing outreach from key sources?
C. What are the most significant barriers to Independent BD advisors paying attention to marketing/sales outreach?
D. What factors distinguish effective marketing/sales outreach to Independent BD advisors?
E. To what extent do Independent BD advisors rely on product providers for digital and web support?
F. To what extent do Independent BD advisors rely on digital or web support from product providers that are restricted or specifically designed for advisors?
G. What activities do Independent BD advisors perform through digital and web support available from product providers?
H. How do activities Independent BD advisors perform through computer or desktop access compare to those actions performed using mobile devices?
I. What are the characteristics of digital and web based support from product providers that Independent BD advisors find most useful?
J. To what extent are Independent BD advisors engaged with social media for business purposes?
K. How have Independent BD advisors access and use of value add and practice management support changed in the past 12 months?
L. To what extent is technology-based value add and practice management support supplanting in-person delivery and what ways of delivering capabilities are most useful to Independent BD advisors?
M. What types of value add and practice management support most useful to Independent BD advisors?
N. What factors characterize the value add and practice management support Independent BD advisors use most often?
Section VIII: Implications and Outlook
· How the role of Independent BD advisors is changing and the risks and challenges they face going forward
· How Independent BD advisors build client portfolios and their changing use of diverse types of investment vehicles
· The receptivity of Independent BD advisors to wholesalers and the wholesaling approaches these advisors find most useful
· The use of insurance and annuities among Independent BD advisors and how insurers can deliver more effective support
· The forms of marketing outreach and value add assistance most useful to Independent BD advisors
· How product providers and distributors can engage with IBD advisors through digital and web-based capabilities
Key Topic Areas
How Independent BD Advisors Manage Client Portfolios
· What sources influence investment decision-making and how relevant are model portfolios and style boxes?
· Which investment vehicles are preferred in building portfolios?
· How is use of active vs. passive investment management changing and for which categories are active solutions in demand?
Independent BD Advisors Use of Annuities and Insurance
· How engaged are IBD advisors in offering insurance and annuities and which categories of products are most relevant?
· What are the key challenges to greater use of insurance and annuities?
· What enhancements and types of support are most important to increase use of annuities and insurance solutions?
Marketing Outreach to Independent BD Advisors
· How much consideration is given to marketing outreach and from which sources?
· What are the characteristics of marketing outreach and value add support that have the most impact on IBD advisors?
· What types of value add and practice management support are most useful?
Independent BD Advisors Use of Digital and Web Support
· What specific actions are IBD advisors most likely to perform using product provider web and digital support?
· What are the characteristics of the most useful digital and web support?
· How engaged are IBD advisors in using social media and what key benefits do they perceive from using these capabilities?
Wholesalers Engaging with Independent BD Advisors
· On which aspects of IBD advisors’ behavior does wholesaling have most impact?
· To what extent are technology-based approaches replacing traditional in-person wholesaling?
· What characteristics define the most useful wholesaling and what forms are most likely to drive action of IBD advisors?
To Order the Report
The study is available in PDF format for the subscription price of $4,950 which includes a discussion of key findings. To order the complete 118- page, 97 exhibit report or for more information, please contact:
Howard Schneider at 978-590-7290
or email howard.schneider@practicalperspectives.com
Introduction and Methodology
Independent broker dealer advisors are a critical audience for asset managers, insurance companies, custodians, and other service providers that rely on intermediary distribution. These entrepreneurial advisors comprise the largest proportion of active retail practitioners and represent a growing share of total industry assets. Independent BD advisors have special characteristics and needs that make them receptive to engaging with product providers such as mutual funds and insurance firms. Despite recent enhancements at large independent broker dealers, many Independent BD advisors lag their wirehouse counterparts in access to technology, tools, and home office support. Compared to RIAs, most Independent BD advisors focus on mass affluent clients rather than on high net worth or ultra-high net worth relationships. In past studies, Practical Perspectives has highlighted many of the different viewpoints and perspectives of Independent BD advisors as part of our proprietary research covering a range of topics relevant and critical to strategic and marketing/sales subjects. In this new report, we build on prior studies we have conducted to share a detailed examination of advisors at independent broker dealers such as LPL Financial, Ameriprise, Commonwealth, Raymond James, and a host of other firms. Our goal is to provide product providers and distributors with insights and implications related to several strategic and tactical questions involving these advisors including:
· How is the role of Independent BD advisors changing and what do they envision as the most significant challenges and needs for support going forward?
· How can providers align with key trends in how Independent BD advisors manage portfolios, including their use of both active and passive solutions?
· How should wholesalers engage with Independent BD advisors including preferences for interaction and how these advisors define the most useful wholesaling support?
· How do Independent BD advisors use insurance and annuity solutions in their practices and how can providers better serve the distinct needs of these advisors?
· What are the most effective marketing outreach and value add support strategies providers can employ to develop and build relationships with Independent BD advisors?
· How can digital and web-based capabilities be used to more effectively engage and serve Independent BD advisors?
The singular focus of this report provides additional in-depth perspective that can enhance the sales, business development, product development, marketing, and support offered to Independent BD advisors. Our research has consistently underscored several differentiating characteristics and behaviors of Independent BD advisors including:
· Highly experienced with majority having 20+ years of industry experience
· A greater focus on mass affluent clients, with average account balances significantly lower than other advisors, and less likelihood of serving investors with $1 million or more in assets
· Higher propensity to function as a solo practitioner or in a smaller team practice
· Moderate technology sophistication and usage, with openness to using digital tools but often lacking access to newer technologies
· Focus on providing a variety of services to clients that go beyond investment management to include activities such as holistic planning
· Far greater engagement and use of insurance solutions, especially annuities
· Greater comfort with traditional marketing and sales efforts, especially wholesaling
· High reliance on packaged investment vehicles especially actively managed mutual funds and variable annuities
· Significant desire for additional support from product providers and platforms across a range of practice management related topics to help operate more efficiently and scale their practices
· Confidence in their ability to meet the needs of existing and prospective clients
Throughout the report, Independent BD advisors are compared to other broker dealer advisors and RIAs as a point of reference and differentiation. These include advisors affiliated with from wirehouse, regional, and national employer-based broker-dealers (Full Service) and those that are pure independent fiduciary RIAs. Notably, many advisors in the Independent broker dealer channel are dually registered and do both fee-based and brokerage business, as appropriate. Virtually all Independent BD advisors are also insurance licensed and assist clients with life, long-term care, or annuity needs arising from risk protection or income planning. In reviewing this report, note that all data presented is sourced through proprietary research published in the past 18 months.
Table of Contents
Section I: Executive Summary
Section II: Introduction and Methodology
Section III: The Changing Role of Independent Broker Dealer Advisors
A. How do Independent BD advisors typically position their support to clients and prospects?
B. How well prepared are Independent BD advisors to serve existing and prospective clients?
C. What do Independent BD advisors perceive as the key challenges and risks to meeting client needs going forward?
D. What aspects of their practice do Independent BD advisors view as most crucial for additional support going forward?
E. Who do Independent BD advisors expect will be their primary client going forward?
F. How do Independent BD advisors expect their practice will change going forward?
G. When do Independent BD advisors expect to no longer be active full-time advisors?
Section IV: How Independent Broker Dealer Advisors Construct Portfolios
A. To what extent is investment management a primary focus for Independent BD advisors?
B. How do Independent BD advisors typically construct portfolios and how responsible are they for portfolio construction decisions?
C. Which third party sources have greatest influence on how Independent BD advisors construct portfolios?
D. How do Independent BD advisors use model portfolios to guide investment decisions?
E. How important are style boxes to how Independent BD advisors build portfolios?
F. How widespread is the use of fee-based solutions and which types of advisory solutions are most often used by Independent BD advisors?
G. To what extent do Independent BD advisors rely on actively and passively managed solutions and how has this been changing?
H. What are the key challenges for Independent BD advisors in using actively managed solutions?
I. How do Independent BD advisors perceive actively managed solutions relative to passively managed solutions?
J. What factors influence Independent BD advisors when selecting specific actively managed solutions?
K. For which equity and fixed income categories do Independent BD advisors prefer active and passive solutions?
L. What forms of support from product providers related to portfolio construction are most important to Independent BD advisors?
M. What changes or enhancements would have the most impact on Independent BD advisors use of actively managed solutions?
Section V: Independent Broker Dealer Advisors Use of Annuities and Other Insurance Solutions
A. How significant a priority is it for Independent BD advisors to offer or recommend insurance solutions to clients?
B. How widely do Independent BD advisors use insurance solutions?
C. How significant are insurance related revenues to Independent BD advisors?
D. To what extent do Independent BD advisors have access to insurance providers and solutions and how many do they typically use?
E. Which key categories of insurance solutions do Independent BD advisors use most?
F. What are the key challenges for Independent BD advisors in considering and using insurance solutions?
G. What are the main drivers for Independent BD advisors in offering or recommending insurance solutions to clients?
H. What sources do Independent BD advisors rely on most for support in selecting the insurance products they offer or recommend?
I. How do clients typically access insurance solutions offered or recommended by Independent BD advisors?
J. What are the characteristics of insurance providers that Independent BD advisors are most likely to offer or recommend to clients?
K. Which aspects of support from insurance providers are most important to Independent BD advisors?
L. What changes would improve Independent BD advisors satisfaction with insurance providers and solutions?
Section VI: Independent Broker Dealer Advisors Engaging with Wholesalers
A. How valuable is wholesaling to Independent BD advisors and how willing are they to engage with wholesalers?
B. How many contacts from wholesalers do Independent BD advisors receive and how do they perceive the volume of contact from key sources?
C. What are the most typical forms of wholesaling outreach directed to Independent BD advisors?
D. On which aspects of Independent BD advisors behavior do wholesalers have the most significant impact?
E. What do Independent BD advisors consider wholesalers do best?
F. How have Independent BD advisors interactions with wholesalers changed in the past year?
G. Do Independent BD advisors prefer a specialist wholesaler or a generalist approach to wholesaling?
H. Is effective wholesaling outreach to Independent BD advisors related to the firm or the individual wholesaler?
I. To what extent are technology-based approaches to wholesaling supplanting in-person contacts for Independent BD advisors and how receptive are they to these approaches?
J. What characteristics define the most useful wholesalers for Independent BD advisors?
K. What changes would increase the usefulness and impact of wholesaling to Independent BD advisors?
L. Which forms of wholesaling outreach are most likely to cause Independent BD advisors to take subsequent action?
M. What specific actions do Independent BD advisors typically take through interactions with wholesalers?
Section VII: Marketing to Independent BD Advisors
A. How much consideration do Independent BD advisors give to marketing outreach?
B. How likely are Independent BD advisors to pay attention to marketing outreach from key sources?
C. What are the most significant barriers to Independent BD advisors paying attention to marketing/sales outreach?
D. What factors distinguish effective marketing/sales outreach to Independent BD advisors?
E. To what extent do Independent BD advisors rely on product providers for digital and web support?
F. To what extent do Independent BD advisors rely on digital or web support from product providers that are restricted or specifically designed for advisors?
G. What activities do Independent BD advisors perform through digital and web support available from product providers?
H. How do activities Independent BD advisors perform through computer or desktop access compare to those actions performed using mobile devices?
I. What are the characteristics of digital and web based support from product providers that Independent BD advisors find most useful?
J. To what extent are Independent BD advisors engaged with social media for business purposes?
K. How have Independent BD advisors access and use of value add and practice management support changed in the past 12 months?
L. To what extent is technology-based value add and practice management support supplanting in-person delivery and what ways of delivering capabilities are most useful to Independent BD advisors?
M. What types of value add and practice management support most useful to Independent BD advisors?
N. What factors characterize the value add and practice management support Independent BD advisors use most often?
Section VIII: Implications and Outlook
RSS Feed