Firms of different sizes continue to expand and to
innovate in order to meet the changing needs of their
advisors, clients and the broader investing climate.
Best in the
2020 2019 2018
Number of companies included in directory: 42* 49 52
Total number of representatives in directory: 68,929 69,786 67,952
Average number of reps per firm: 1,705 1,470 1,332
Number of reps added/dropped: 2,632 / 3,138 4,530 / 3,756 8,959 / 6,287
Average annual gross production per rep: $283,089 $265,930 $239,862
Average AUM per representative ($ mil.): $41.9 $40.1 $37.6
Average gross revenue per BD ($ mil.): $275.8e** $283.8e** $236.88e**
Average fee-based revenue per BD ($mil.): $145.2e** $193.1e** $103.0e**
* Some broker-dealers that completed the poll last year did not do so this year due to the coronavirus, M&A and other issues.
** Estimate based on data from 36 BDs, with many large firms declining to provide 2020 estimates.
Industry consolidation remains a dominant industry trend, according to data compiled by the Financial Industry Regulatory Authority and Investment Advisor’s 2020 Broker-Dealer Reference Guide.
FINRA’s latest figure for the total number of broker-dealersis about 3,500 — down from roughly 4,700 a decade ago andrepresenting a drop of over 100 BDs on average each year.
The overall number of registered representatives is declining more slowly. It stands at about 629,500 vs. 630,300 a yearearlier and 633,000 some 10 years ago.
Some recent deals in the broker-dealer space include LPLFinancial’s purchase of Allen & Company last year; it had some 30advisors and $3 billion in client assets. In late April, the IBD saidit planned to buy Lucia Securities, which works with $1.5 billion.
And, of course, there’s the mega-deal that closed ear-
lier this year: Advisor Group merging with the Ladenburg
Thalmann BDs to create a group with about 11,300 advisors
and $450 billion in assets. (This transaction was announced in
November, six months after private-equity group Reverence
Capital Partners bought a majority stake in Advisor Group
from Lightyear Capital, PSP Investments and others.)
In May, Advisor Group said three of the five ex-LadenburgBDs — Investacorp, Securities Service Network and KMS —are set to become part of Securities America, the largest of theformer-Ladenburg BDs. Securities America and SSN appear inthis year’s top 10 lists, as do some other Advisor Group BDs.
Amidst the current turmoil, firms and their advisors canprove their mettle. “Today, with some of these major strategyshifts, IBDs are proving to be more agile and adaptable to advisordemands and industry trends — and once again, represent a solidoption for advisors considering independence,” explained LouisDiamond, executive vice president of Diamond Consultants.
By Janet Levaux | Data compiled by Liana Roberts