A sigh of relief came from the 17,291 global-wide financial advisors at Morgan Stanley last Friday when a spokeswoman from MS told OnWallStreet that advisors would not be included in the cuts planned for the first three months of 2012. (A Bloomberg story had broken the day before that 1,600 jobs would be eliminated.)

According to the spokesperson some other positions within the wealth management sector would be eliminated but they would not be advisors.

It was noted that MS financial advisors have average annualized revenue per rep of $747,000 and total client assets per rep of $90 million — so, who in their right mind would want to cut that?

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Dream big or go home…

Financial Advisor’s 2011 RIA Survey cited 91 of 454 firms participating in the survey had actually reached the “Billion Dollar Club” status, and 17 of them were new entrants. (Up from 21 in 2005, when the survey was inaugurated.)

But in 2008, it looked pretty grim with assets and staff plunging. The climb back up has been tough as Financial Advisor ’s Eric Rasmussen reports in “Bouncing Back.” Great reporting and worth the read.

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The Schwab Franchise issue popped up at TD Ameritrade’s 2011 Elite Advisor Summit’s opening session Q&A portion two weeks ago in Miami Beach.

It seems that an advisor asked Tom Bradley (president of TD Ameritrade) and Fred Tomczyk (CEO) about Schwab’s plans to open franchises with independent contractors.

Though they conceded they would be “watching with interest”, they made it clear they had no plans to start franchises, and were a bit perplexed as to why Schwab would want to focus on expansion physically outside their own branches and with the ongoing regulatory issue uncertainty . Tomezyk reiterated that TD’s expansion was focused on increasing sales force, not offices. (TD has added about 100 salespeople every year since 2008.)

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Last week 409 independent financial advisors gathered in Chandler, Arizona to attend the Peak Advisor Alliance Excell Meeting.

At one session, Ron Carson of Carson Wealth Management asked the attendees how many ask for referrals at every opportunity.

Very few advisors raised their hands. Since the majority of business is actually done by referrals, and advisors are “coached” to ask for referrals why are so few of them actually doing it? Appears that most are just not comfortable doing it because they don’t know how or when to do it, or lack the confidence to “sell” themselves and their expertise.

Carson said the “comfort” comes by educating your clients as to why they love you and doing business with you; the “when” is initiated by you at targeted events whether is be at a sporting event or over a beer or coffee after work, and always when someone compliments you.

Matthew Halloran, a coach at Peak, said “Confidence is the real difference between a pro and a real pro…an advisor needs to work to solicit a compliment, then ask a lot of open-ended questions to gain information from clients which will generate referrals.”

Said it before and will say it again…you have to sell yourself and your services over and over and over again.

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Found a really “good read” to share in the 04/25/2011 edition of Financial Advisor by blogger Josh Brown, contributor and a vice president at Fusion Analytics advisory firm and the author of The Reformed Broker blog.

The aging factor of the advisor population has been tossed around over and over, but I found this blog to be a pretty good analysis as to the five primary reasons why the pool is so shallow. Stick with it to the end to find the good news and ‘silver lining’.

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For anyone who is relying on communication to promote their business, whether it is providing product or service, you have to admit it’s a very noisy, congested, and ever changing world out there.

Rule number one: you must stand out and grab attention. The best way to do this is to communicate your unique value and services with a follow up of how the recipient can benefit from them. Words have power, so use those that “sell” and choose them wisely.

Looking for a new “home”? Let us hear from you…

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Of note last week was the announcement by Bank Investment Consultant that financial advisors last year sold a whole lot more mutual funds, ETF’s and other equity-linked products while continuing to increase annuity sales.

In addition, the trend toward more fee-based income and away from commissions continued. More advisors were making the high end of their grid than in 2009 when BIC’s survey indicated advisors in distress due to market trends and fear of investors to enter the stock market.

Bottom line, payouts and total income of advisors have been rising, recruiter calls are way up and one can only point to strong and upbeat market conditions. Clients are clearly re-entering the market and advisors are feeling and acting more optimistic.

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Read Bill Willis’ new article for OnWallStreet, The Treasure Within, set to publish on November 1, 2010.

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Many big firms are utilizing the best technology to lure advisors to come on board. One of the main concerns of advisors looking to breakaway is whether or not they will have the availability to properly service their customers with the most advanced software. It puts advisors at ease knowing that their platforms will run smoothly.

If you are an RIA firm looking for breakaway advisors, make sure you have a client relationship management (CRM) software program that functions properly with financial reporting and portfolio management systems. An advisor who breaks away from a wirehouse is used to the best technology and will look for an RIA firm that offers something comparable.

There are so many different software products and trading platforms necessary to run a successful business. Make sure all of the software programs you offer integrate together. New integration products are being designed to help your firm run as smoothly as possible.

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Wirehouses have been beaten up lately mostly because of all the bad press and the destruction of their brand names. Financial advisors are looking to breakaway to other channels. Every channel has seen double-digit growth within the past year except the wirehouse channel. Granted, they still have the majority market share.

With this troubled economy we see a significant amount of advisors looking to breakaway primarily due to lack of cash flow. Advisors are getting paid up front for moving to another firm and that helps those who are struggling. It does surprise me that financial advisors are willing to leave a quality firm or wirehouse just for the money. It is unfortunate to see because is this really helping their clients or are they just being self-serving?

According to a survey conducted by the Aite Group, “A desire for a higher payout (came in) third place among rationales for leaving…”

Wirehouses are aggressively trying to retain advisors while recruiting advisors from other channels or younger advisors. It is a tough uphill battle for wirehouses, but the deals they are offering advisors to move may be too good to pass up as well.

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