Mr. Leeds offered his insights into the ever evolving Independent Broker Dealer industry, the increase in regulations and the ultimate objective of his Firm.
“When meeting with other CEOs at the conference, I asked them what their No. 1 issue is for 2013. The answer is always to drive recruiting,” Marshall Leeds said. However, Mr. Leeds suggests that the No. 1 issue should be retention of an advisor. “Ninety-nine percent of the time it’s the firm’s fault. If you bring a guy in, he’ll do 70% of his business in the first year. You’re already in the hole for those transition costs. It will take two years to replace that production,” Leeds stated. Summit is mainly recruiting independent financial advisors from other independent broker dealers, which is a sign that advisors are not getting what they were promised.
Mr. Leeds, who is in his 30th year in the business, explained that advisors used to receive 90% payouts and nothing up front. He believes it was a great model at the time, but now we’ve taken a great model and made it lopsided. He added that, “We make less and advisors expect more. We created margin compression. It only results in less service for advisors, so it’s a lesson in being careful what you wish for.”
As for regulations, Leeds directly stated, “It’s a simple issue for me. Like the Obama tax, it’s here to stay, just deal with it. It’s a cost of doing business.”
Summit Brokerage Services has 320 advisors, and they average more than $300,000 in GDC, one of the highest in the industry.
Summit continues its rise in the Independent Broker Dealer channel by offering high personal touch and world class service. It appears that Mr. Leeds and the Summit home office associates are dealing with the changes in the industry quite well.
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For more information on Summit Brokerage Services, visit www.joinsummit.com or contact us at (800) 354-5528.