In terms of gross revenues in the broker-dealer industry, it seems the big just keep getting bigger, according to the Financial Advisor's Annual B-D Ranking & Survey.
The list of U.S. broker-dealers that finished 2017 with the most revenues doesn't contain many surprises, as many of the dominant companies in the sector continued to grow, both organically and through acquisitions.
Adding bulk continues to be important to broker-dealers, who are striving to be cost-effective and competitive in an environment where profit margins are being squeezed and demands for client service are increasing.
Clearly, consolidation was one of the big trends among broker-dealers last year. No one expects that to change, and it is spawning recruiting opportunities.
In February, LPL Financial officially completed its purchase of assets from those broker-dealers formerly under the umbrella of National Planning Holdings. That deal set off a scramble by competitors to grab NPH-affiliated reps. According to its latest disclosures, LPL expected to get about 70% of NPH reps’ production, which would be just near the range of what the firms expected according to terms of the deal. The deal required LPL to begin contingency payments if it retained 72% of production.
Also in February, Cetera Financial Group confirmed that it had retained Goldman Sachs to support a “capital structure review” process and identify future strategies. That news, of course, led to speculation that Cetera would be put up for sale.
“Independent advisors are anxious about the future right now,” said Securities America CEO Jim Nagengast. “Advisors want two key things from the firms that support them right now: the stability to help them plan ahead for their clients and practices, and the personal touch that assures them they won’t be just another number.”
The following broker-dealers, in ascending order, registered the largest revenues at the end of 2017:
10. Securities America
$637.3 million
Securities America had assets under management of $86.8 billion and 2,506 producing reps in 2017, each grossing an average of $280,496 with payouts of up to 95 percent.
9. Lincoln Financial Network
$740.2 million
Lincoln had assets under management of $28.5 billion and 8,927 producing reps who received payouts of up to 90 percent.
8. AXA Advisors
$786.5 million
AXA had assets under management of $136.6 billion and 4,668 producing reps, each grossing an average of $168,493 with payouts of up to 92.5 percent.
7. Cambridge Investment Research
$811.4 million
Cambridge had assets under management of $94.2 billion and 3,175 producing reps, each grossing an average of $262,588 with payouts of up to 100 percent.
6. Northwestern Mutual Investment Services
$949.7 million
Northwestern had assets under management of $152.2 billion and 4,984 producing reps, each grossing an average of $190,548 with payouts of up to 85 percent.
5. MML Investors Services
$1.05 billion
MML had assets under management of $224.8 billion and 8,628 producing reps, each grossing an average of $121,777 with payouts of up to 86.9 percent.
4. Commonwealth Financial Network
$1.24 billion
Commonwealth had assets under management of $156 billion and 1,778 producing reps, each grossing an average of $698,297 with payouts of up to 95 percent.
3. Raymond James Financial Services
$2.07 billion
Raymond James had assets under management of $282.9 billion and 3,960 producing reps, each grossing an average of $523,041 with payouts of up to 84.6 percent.
2. Ameriprise Financial Services
$4.26 billion
Ameriprise had 7,686 producing reps, each grossing an average of $554,253 with payouts of up to 91 percent.
1. LPL Financial
$4.28 billion
LPL had assets under management of $272.9 billion and 15,210 producing reps, each grossing an average of $281,491 with payouts of up to 87 percent.
