Although some financial advisors turned toward transactional models during the downturn of the economy and loss of business, the majority are moving toward a fee-based business for their clients. Investors are still reeling from their losses and still unsure about what the future holds. Advisors need to find more options for their clients to get through the storm.

According to a survey by Russell Investments, “…39% of advisors are selling more annuities, in a response to customer demand for products guaranteed income products.” While clients are looking for a safe place to put their money with guaranteed income, they need to be aware these products aren’t always as great as they seem to be. These products also generate a nice commission for these advisors helping them to stay afloat or recoup their loss of business. Clients should be aware of the fine print.

Many financial advisors who were using transactional based models tend to have a larger client base than fee-based advisors. They are realizing how much extra time and effort they have to provide their fee-based clients. It is still an uphill battle for most financialadvisors to figure out the best way to retain as well as build their businesses. Clients are more demanding as ever in this economic aftermath.

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Wirehouse firms know all too well that their efforts to retain top representatives by offering deferred compensation plans and forgivable loans are not enough. Financial advisors know they have to repay these loans if they decide to leave early. In effect, firms have to find new and creative ways to keep their advisors from being plucked by aggressive finance recruiters to the independent world.

Barbara Herman, senior consultant for Diamond Consultants, states,

“Now more than ever, retention depends on providing real value to the advisor at every production level and at any tenure in the industry.”

How do you add value to the advisor? Rich Franchella, Sr., manager for RBC Wealth Management, has had success retaining the financial advisors in his territory. He has a few options. A primary concern for advisors is their BOM is not available when they need them. Make sure to provide financial advisors with a way to reach you whether you are in the office or not. Also, make sure to value your to advisors by helping invest in them and help them plan for their own financial future.

These ideas are effective to make advisors feel they are appreciated which makes them feel valued. This may be just the way to retain the advisors you already have.

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Fifth Third Securities has been aggressively recruiting candidates for its investment sales team. They just hired a sales person to run the eastern territory and a sales manager for Tennessee and Georgia.

Howard Hammond became president four years ago and is primarily responsible for this move towards advisor driven investing. Before Hammond, its primary focus was annuity driven. According to Inside Fifth Third’s New Investment Sales Team, Howard J. Stock states, “Before (Howard Hammond) joined, annuities (fixed and variable) made up 60% of sales; now they account for just 15%, (Hammond) says.”

All managers for the sales team at Fifth Third Bank have been producers at some point in their careers so they are aware of all the opportunities and challenges advisors face. This gives them an advantage in recruiting the right candidate. Fifth Third has over 1,000 branches covering 12 states and is trying to take over new territories while increasing its existing territories. Hiring the right sales managers is the key to growing their territories. According to Howard J. Stock,

“Michelle Griffith (new sales manager for the eastern territory) has just hired the 19^th advisor in her territory and plans to add more whenever she finds a promising candidate. With a territory of 70 branches, there’s plenty of room for growth as she takes a slice of the program forward.”

Just like Griffith, other sales managers are combing their territories in search of the perfect candidates to work for Fifth Third Securities. Fifth Third hopes to increase their branches in all territories substantially in the upcoming years. Howard J. Stock states, “The bank’s goal…is to eventually have 200 branches in Georgia and 65 to 70 in Tennessee.”

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Pay Czar Feinberg thinks so, and is moving forward to take a look at 104 top executives beneath the CEO’s and their payouts during the financial crisis – all within companies and financial firms who received TARP funds.

The Management Executive Committees of the firms have claimed the necessity to provided large payouts and retention bonuses in order to keep and recruit top producing executives (stats pointed to 88 execs who stayed with their original companies).

But what will exposure mean?

Nothing, really, as Feinberg can only “recommend” reduction in pay and publically “expose.”

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