See Table of Contents for Tiburon's FA Profiles Research Report Tiburon Strategic Advisors, a market research & strategy consulting firm serving a wide variety of financial institutions and investment managers, is pleased to announce the release of its new research report on Financial Advisor Profiles. This research release summarizes some of the report's key findings. The purpose of this report is to provide readers with an initial understanding of the profiles & best practices of leading financial advisory firms across a wide variety of traditionally defined markets & distribution channels. The report includes detailed profiles of over 700 leading financial advisory firms (a wholesaler's bible), seeking to identify best practices in critical areas such as sales & marketing, staffing & compensation, technology use, & succession planning. This is the second draft of Tiburon’s research on this topic. Tiburon’s first draft of this report was published in 2005; that draft consolidated prior Tiburon research into one report. That version was also bundled with Tiburon’s financial advisor benchmarking & best practices research report, and it focused primarily on developing an organized structure for reviewing financial advisor benchmarking data and establishing profiles on hundreds of financial advisory firms across a dozen categories, including wirehouse, regional, & boutique broker/dealer brokers, independent reps, fee-based financial advisors, and CPAs & other tax professionals. This is Tiburon’s second draft of this report; this draft is unbundled from Tiburon’s equally thorough financial advisor benchmarking & best practices research report. This draft is also coordinated with the findings from Tiburon’s financial advisor mergers & acquisitions research report and its structure is aligned with that of other Tiburon research reports. This draft also includes dozens of refined and new profiles, including those for the Focus Financial Partners firms and the Convergent Capital Management firms, as well as other firms such as Argent Financial Group, Oxford Financial Group, Trust Company of Illinois, & Trust Company of Virginia. Key Findings This report has a long list of interesting facts to share: Growth Rates of Independent Reps The average rep firm has grown its revenues 16% per year; larger firms have grown their revenues faster Growth Rates of Fee-Based Financial Advisors The average advisor has been growing revenues 19% per annum, with growth rates steady across firm sizes Growth Rates of CPAs & Other Tax Professionals The average tax professional has seen 12% growth in revenues per annum; growth rates across revenue segments have been relatively consistent Five Best Practices Define Leading Financial Advisor Firms This section will outline the five best practices utilized by leading financial advisor firms: Fee-based financial advisors & independent broker/dealer reps generally excell at three of the five identified best practices Determine Clear Target Markets Focus Financial Partners has 18,000 clients, up over 50% since 2007 40% of the clients of independent reps have $100,000 - $1 million in total investable assets and another 19% have $1-$5 million Other independent reps have been successful by staying focused on the much larger $100,000 - $1 million market IRA rollovers are the leading source of assets captured by independent reps (36% of all new client assets) On the other hand, the best sources of prospects’ assets can differ by geographical market; other leading sources include: other sources of new money (e.g., inheritances) (22%), periodic investments from earnings (17%), money moved from full-service brokers (13%), and money moved from other providers (e.g., banks, discount brokers, and no-load mutual fund companies) (12%); few dollars move from one independent rep to another Choose Product & Service Offers to Support Chosen Target Markets City National Corporation’s Convergent Capital Management’s Convergent Wealth Advisors’ assets under management are three-quarters US equities and cash & other asset classes Fee-based pricing models are certainly the booming business model for independent reps, although reps are still early in this transition, with just 16% of client assets being invested in fee-accounts Larger independent reps show a broader use of fee-accounts (~20%-30% of client assets) Amongst new investment products, separately managed accounts (63%), exchange traded funds (47%), and hedge funds (42%) seem to be getting the most attention Develop Appropriate Sales & Marketing Methodologies Fisher Investments' Private Client Group spends $45 million per year on direct mail and web advertising While passive client referrals are wonderful to receive and account for 36% of all new independent rep clients, there are two key points to consider regarding client referrals, including methods for making them more frequent and methods for lessening one’s reliance upon them Today another 20% of clients come from proactive efforts, suggesting that over half of all new clients may come from relationships with current clients Networking (10%), seminars (6%), and other sales & marketing methods are used quite effectively by small groups of independent reps Build Necessary People & Technology Support Infrastructure City National Corporation’s Convergent Capital Management's Convergent Wealth Advisors has 108 employees, off from 135 in 2006 but up hugely since 1997 Partners only account for 13% of the staffs of the largest independent rep firms while accounting for 36% of the smallest firms The largest independent reps allocate 37% of their expense budgets to staff compensation while the smallest independent reps allocate 32% Morningstar remains the leading technology product in multiple categories (e.g., financial planning software, asset allocation software, and data & research services) and is utilized by 42%-67% of reps for each activity Define Business Goals & Develop Written Plans Fisher Investments’ Private Client Group attracts two-thirds of its clients to a seminar each year Larger rep firms are more likely to have business plans (71% versus 62%), marketing plans (35% versus 30%), and especially employee manuals (63% versus 21%) Only 10% of independent reps have succession plans, although a greater share of larger independent reps have one Leading coaches amongst independent reps include Bill Bachrach (11%), Tom Gau (11%), and Dan Sullivan (10%) To better understand the developments for FA Profiles, executives can purchase Tiburon's Financial Advisor Profiles: Learning Best Practices by Profiling Leading Firms research report where the key findings highlighted above are covered in greater detail. Please contact Sarah Sage at SSage@TiburonAdvisors.Com or 415-789-2540.