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BNY Mellon's Pershing study finds keys to client retention for broker/dealers.

BANKING AND CREDIT NEWS-August 27, 2015-BNY Mellon's Pershing study finds keys to client retention for broker/dealers


BNY Mellon company Pershing LLC said it has released results of a study called Why Teams Are the Client of the Future for Broker-Dealers that finds broker-dealers must recalibrate their relationships with their advisors in order to remain competitive in today's financial advice industry.

The report points out that changes in the advisor-client of the modern broker-dealer present different challenges and opportunities that broker-dealers must navigate. These changes provide broker-dealers with an opportunity to rethink their overall strategies to attract and retain top clients.

According to the report, the top client of today's successful broker-dealer is not a "rep" or even an "advisor" but an ensemble, which is a firm or a team of multiple professionals that service and manage client relationships. Ensemble teams are already controlling a significant percentage of broker-dealer revenue, growing faster than the average practice, servicing a higher-net-worth client base and offering better career growth opportunities. Most importantly, ensembles are net acquirers. They are acting as a successor for many of the smaller solo practices and are likely to emerge as the ultimate consolidators of the industry.

While ensembles are valuable to broker-dealers, they are also at risk of being lost as clients. Many larger teams are departing broker-dealer firms to become independent. These advisors, known as breakaway advisors, are moving to a registered investment advisor (RIA) or hybrid business model. Industry changes continue to increase the possibility that successful teams will part ways with broker-dealers.

Despite the challenges, broker-dealers can successfully recruit, retain, and work with ensembles by better understanding how they work and by restructuring affiliation models. Pershing's report highlights actionable ways for broker-dealers to accomplish this, including:

o Restructure relationship management

o Focus on holistic financial advice

o Understand the ensemble team's vision and business strategy

o Think in terms of outsourcing

o Give ensemble teams examples of success and thought leadership that they can study and replicate

o Create and foster a culture

Pershing and its affiliates provide global financial business solutions to advisors, asset managers, broker-dealers, family offices, registered investment advisor firms and wealth managers.

BNY Mellon is a global investments company dedicated to helping its clients manage and service their financial assets throughout the investment lifecycle.

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Publication:M2 Banking & Credit News (BCN)
Date:Aug 27, 2015
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