As a whole, however, the company's advisors manage a total of $50 billion in assets. That, Roberts says, represents a lot of business that has yet to be moved over to National Advisors Trust. Most of the growth is expected to be in the trust services side of the business, which was the key driver of the founding of the company, according to Roberts. "The trust and employee benefits is the thing we try to emphasize," Roberts says.
Raymond James Financial Services, which launched its fee-based advisory services division three years ago, has been focused on helping brokers make the transition to fee-only independent practices. The division currently has 33 advisor relationships, with six more in the pipeline, says Michael Di Girolamo, senior vice president at Raymond James Investment Advisors Division. The advisors have total assets under management of about $1.5 billion, he adds.
As regulations become more stringent, and investors look for more objectivity in their financial advisors, Di Girolamo says the expectation is that trend will continue to be towards fee-only services. "They're having more difficulty justifying staying in a brokerage firm environment because of the conflicts of interest they see between themselves and the brokerage firms," he says. "Plus, there's the additional pressures being put on them from the regulatory changes ... People are frustrated."
With the "breakaway broker" in mind, Raymond James has set up a three-month process that allows reps to join Raymond James and transition to being their own independent advisor, including help with setting up an office, establishing contracts, and referrals to consultants and attorneys who help them through the process. "We've been targeting people who are substantially fee-based anyway and managing their assets as a portfolio in a brokerage firm," Di Girolamo says.
Ameritrade, which entered the advisory services market three years ago, has been touting competitive pricing and accessible technology in its drive to carve out a greater niche in the industry. The firm is zeroing in on advisors with assets in the range of $5 million to $50 million-a subgroup of advisors that has been hit with higher fees at Schwab and some of the other larger players in the marketplace.
Yet in a recent interview, James Wangsness, senior vice president of Ameritrade Advisor Services, says the introduction of new separate account and bond-trading services will likely allow the company to expand its upper range of advisor clients. "These products not being available was keeping us out of the higher-level accounts," Wangsness says. "We've rolled them out because that's what our advisors have asked for."
The services have been added to the Ameritrade platform through third-party agreements. The bond-trading capability is provided by TheMuniCenter LLC, a centralized Web-based marketplace that touts a $6 billion inventory of municipal and corporate bonds, Wangsness says. The firm is a joint venture of a group of Wall Street firms including Merrill Lynch, Morgan Stanley and Lehman Brothers. It offers live pricing-"When you hit 'Bid,' that's what you get," Wangsness says-and a non-proprietary sales desk.
The separate accounts are offered through ADVISORport Inc., whose platform offers access to more than 25 money managers utilizing more than 40 different capitalization and style categories.
The company says growth was on the upswing before the introduction of the new services. The company has about 1,000 advisor relationships and about $2 billion in assets under management, up 135% and 366% respectively from last year.