Mindy Diamond, president of Diamond Consultants, a search firm that specializes in financial advisors, says most of the advisors who departed "couldn't get past the bad press of the AIG name," despite a fairly substantial retention package. "The other 80% who stayed," she says, "were not unhappy with the service level from the B-Ds. They liked AIG, largely it had a good payout, was a good place to work, and most of them didn't lose a single client. When you're independent, the clients are more yours; it's less about the name of the firm.

"Because they did a pretty good job of distancing the names of the B-Ds, they were able to insulate a lot of the advisors and their clients from the debacle surrounding the AIG name. A client of Royal Alliance, for example, was probably unaware of any association with AIG. It was AIG Financial Advisors that they since renamed SagePoint Financial. So they're not losing any brand identity with AIG. That's what insulates them."

Nowhere, in fact, does the Advisor Group retain any vestige of AIG today. Roth quips he's the only person at the Advisor Group who has AIG on his card. "At some point, I'll take it off," he says, "but I still feel we have been protected and supported by the parent."

Retention of Advisors
All three B-Ds are currently doing their own recruiting. Each has its own recruiting team. For example, SagePoint Financial has three in-house recruiters working full time.

"Some advisors contact us for more information directly, but many are referred to SagePoint and their recruiters either by our existing advisors or third-party recruiting firms," says Jeffrey Auld, president and CEO of SagePoint. "Our recruiters are not just sitting in chairs; they move across the country."

"Throughout the financial crisis and challenges at AIG, over 80% of our advisors maintained their affiliation with SagePoint Financial," continues Auld, adding that the advisors who stayed "represent our most talented, successful advisors."

Shortly after joining the firm in the fall of 2008, Auld changed the name of AIG Financial Advisors to SagePoint Financial after considering over 100 possibilities. "It had become too much of a distraction," he says.

"Our goal is to help our advisors grow their practice and help their clients succeed. Investing in their business and their brands are important factors," Auld says. "I think our brand has also helped our recruiting efforts. While the vast majority of our recruits can be attributed to referrals from current advisors-over 50%-SagePoint Financial is a powerful brand, and we're talking to advisors across the country who are considering us as their broker-dealer."

For its part, Royal Alliance, the largest of the B-Ds in terms of GDC with a branch-type operating system, has steadily increased its recruiting efforts and currently has 2,000 advisors, down from a peak of 2,500-2,600 before the financial crisis, according to Art M. Tambaro, president and CEO, who attributes the broker-dealer's fairly consistent retention levels to a long culture of personal relationships formed among advisors at the firm. The majority of them have logged at least 15 years with Royal Alliance and many 25 years or more, notes Tambaro.

"Our normal retention of GDC is about 97%," says Tambaro. "In 2008-2009, our worst period ever, our retention went down to 89%, or 8%, and today we're back to our 97% retention levels. We recruited in first Q 2010 more GDC than in all of 2008 and 2009 combined."