As wealth managers seek to recruit and retain the most productive financial advisors, one of the largest firms aims to coach and train practices in how to ramp up.
Independent broker-dealers like Cetera Financial Group are vying for advisors who have more options than ever when it comes to finding a partner to support their growth. In a bid to boost its own business while giving advisors added value without any additional cost, the Los Angeles-based firm launched Growth360 to deliver the lessons from its fastest-expanding affiliated practices and enterprises to representatives eager to reach their level someday.
While Cetera’s rivals can point to similar resources and a focus on helping advisors bring scale to their practices, the private equity-backed firm has built out a full program with nearly 35 “growth officers” and other staff led by its former head of retirement, Jon Anderson. Growth360 begins with an assessment of the practice, a comparison against the benchmarks of the top performing advisors and an identification of the top three potential opportunities for improvement. From there, the program connects advisors with resources to assist them.
For example, if an advisor received a low score in their use of the customer relationship management software, the program would provide them with case studies about how their most successful peers deploy the CRM and “point them directly to tools at Cetera,” Anderson said.
“If you boil it down, we're really trying to make it as easy as possible for those advisors to grow the value of their businesses,” he said in an interview.
The Genstar Capital-backed firm didn’t identify the advisors sharing their best practices under the program, though Anderson noted that they come from practices and enterprises of all sizes across the five BDs that are part of the Cetera network.
Amy Wolff of Edina, Minnesota-based AJW Financial is a 23-year stalwart of Cetera Advisor Network whose practice uses one of Cetera’s largest enterprises, AdvisorNet Financial, as its office of supervisory jurisdiction. Her practice has reached $290 million in client assets with a team of 11 advisors and other staff, and she scored an 82 on the Growth360 assessment. She aims to move up to a 100, she said, by leveraging more social media and bringing more efficiency to the practice’s sales process.
Wolff set a goal of adding about a dozen clients and $20 million in net new assets each year. The practice has found a niche by working with women who are going through divorces.
“We run at a fast pace and I love working with clients,” Wolff said. “I have a responsibility to my clients to have a good practice set up so if something happened to me they'd be OK.”
Like many advisors and wealth managers, Wolff also said she subscribes to the notion that if a firm isn’t growing, it’s dying. In Financial Planning’s IBD Elite rankings of the largest independent firms, Cetera’s $1.93 billion in annual revenue comes in at No. 5 among giants that have mostly been getting bigger at a faster clip in recent years.
Indeed, Cetera’s rivals pitch prospective advisors on their own tools and resources for independent teams. At Ameriprise, CEO Jim Cracchiolo usually devotes time in every quarterly earnings call to praising the rising productivity of the firm’s 10,000 advisors, and he said earlier this year that they
Other firms are trying to supercharge growth as well. Waltham, Massachusetts-based Integrated Partners represents one of the larger LPL hybrid RIAs and OSJs expanding through its recruiting and in-house resources. About 140 accounting firms work with Integrated’s referral program, giving its 160 advisors the ability to provide wealth management services to the largest clients of the CPA firms, according to founder Paul Saganey. In addition, the firm facilitates M&A deals for its practices and hosts weekly events for advisors such as study groups, said Chief Growth Officer Robert Sandrew.
In 2021, Integrated has recruited 11 teams with $2.4 billion in client assets. By the end of the year, Integrated will have between $13 billion and $13.5 billion in client assets, compared to only about $3.5 billion roughly five years earlier.
“The education in our space has gotten much better around going independent and what it means,” Sandrew said. “The ability to grow with us is paramount, and the advisors that are looking to join our organization want to put themselves in a position to succeed.”
Not every advisor would like to ramp up the size of their practice or raise its value, however; some are happy to stay the same size. Cetera’s new program won’t be required for advisors, Anderson said. The main takeaways will relate to six different areas: organic growth; recruiting and practice acquisition, practice efficiency, human capital, financial discipline, client solutions and succession and practice monetization.
“It's really supporting and meeting advisors where they are, and I think the Growth360 experience helps us to do that in a scalable way,” Anderson said. “None of this is mandated, but we want to encourage our advisors to potentially go through this.”
