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A New Way to Increase Revenues

Want more income? Simply affiliate with an independent BD that makes GDC a priority.

David J. Drucker, 06/19/2008

Being primarily a practice management and technology writer, it's always of interest to me when a small, independent broker-dealer distinguishes itself from the competitive pack by helping its reps build more-successful businesses. As broker/dealers recruit aggressively from the same labor pool--a zero-sum game, according to most observers--it must do more and more to lure reps to its playing field.

Which is why VSR Financial Services is getting noticed these days. This Overland Park, Kan., broker/dealer with all of 258 reps took one trade magazine's number one spot in 2006 for average production, consistently ranking with or above the big boys when it comes to productivity measures. The question is... how do they do it, and what's possibly in it for you?

Let's look at the numbers first. In 2007, VSR ranked as follows among some of its bigger brethren (all stats from Investment News' Spring 2008 independent broker/dealer survey:

Firm                        Avg Payout Per Rep      Avg Fee-Based Assets
                                                              Per Fee-Based Advisor

LPL Financial                      $186,900                           $9.2 million
Cambridge Inv. Research      $187,000                           $5.7 million
Securities America              $252,000                           $9.7 million
Commonwealth Fin. Net.       $319,000                          $18.5 million
VSR Financial Services        $354,000                             $10.3 million


Some broker/dealers start to show better numbers when their reps move increasingly toward doing more fee-based business, including money management. But that's not VSR's sole source of strength. Although its reps who qualify as "fee-based" manage, on average, $10.3 million, Cambridge Investment Research and Commonwealth Financial Network reps far exceed that number, with $15.7 million and $18.5 million, each.

I probed Mike Stanfield, VSR's CEO, and Don Beary, its chairman, for some answers. Both having wirehouse backgrounds, Stanfield and Beary met in 1980 and, all told, have 35 years apiece in the financial services business.

Having both earned CFP designations in the 1980s, "We embraced the popularity associated with being a financial planner instead of a broker," Stanfield said. So he and Beary, plus two others, left the broker/dealer they were all with in Kansas City and started VSR in 1985.

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