Brokerage holding company says it's taking advisor-centricity to new levels. In a fight for the hearts, minds and asset-gathering prowess of high-end brokers, Chicago-based Advanced Equities Financial Corporation (AEFC) wants to set its wealth-management subsidiaries apart from their competitors. To that end, the holding company's San Diego-based independent broker-dealer First Allied Securities and its own-staff brokerage Advanced Equities Inc. have armed their reps with an unusual investment platform and access to continuing education.

And by one measure at least this policy seems to be working. In June 2006 Investment Advisor magazine said AEFC's First Allied had the highest average annual gross production per advisor -- $282,000 -- of any independent broker-dealer.

Education, etc.

"Every firm says it's advisor-centric, but they're all doing the same things -- and so were we," says AEFC's vice chairman and COO Joel Marks. "We looked at that said we're doomed going up against bigger names, bigger brands. So we decided to invest in the advisor like nobody else."

AEFC's investment in the advisor comes down to support for the advisor in the form of a wealth-management platform and related technologies for traditional and alternative investments, asset allocation, financial planning, insurance and corporate services. In addition the company provides consulting and implementation services around transition and practice management to marketing, communications, compliance and on-going education including -- and at no cost to the advisor -- training with the Cannon Financial Institute, an Athens, Ga.-based wealth-management education provider. Cannon's curriculum includes the Certified Wealth Strategist designation; a two-day course that retails for $3,200.

"Very few advisors have access to this kind of continuing education," says Marks.

Eight-year-old AEFC, which started out as an investment bank with a tech-firm focus, also sees its ability to help advisors provide their clients with opportunities for late-stage venture investing.

Late stage

Though it draws on open-architecture resources for a traditional-investment platform -- including individuals stocks, fixed income, mutual funds, ETFs and separately managed accounts -- "as comprehensive as Raymond James' or Wachovia's," according to Marks, AEFC-affiliated advisors can also access these Reg D venture-capital investments as an in-house offering.

These high-end investments account for a comparatively small part of AEFC's total client assets: only about a fifth of the company's 900 or so affiliated and staff brokers offer them. But the ability to offer them is a powerful lure to ultra-high-net-worth investors and a strong point of differentiation in a crowded and increasingly commoditized marketplace, says AEFC's president Adam Antoniades. In sum, says Antoniades, AEFC's goal is to help its reps "compete in any vertical and win."

AEFC has seen its consolidated sales go from $6 million in 2003 -- the year it acquired Alamo, Calif.-based independent broker-dealer Round Hill Securities (now part of First Allied) -- to $140 million in 2005 (the year it bought First Allied from Wells Fargo) to a projected $300 million this year. In 2008 it's shooting for $400 million.

Though AEFC may buy a trust company to round out its wealth-management capabilities, Marks and Antoniades say the company is unlikely to make another acquisition in the near term. In other words, it's projecting a 33% hike in consolidated revenue next year solely through organic growth.

Carbon copies

To support this growth, AEFC is pulling out the stops on recruiting and "same-store sales," says Marks.

With that in mind, AEFC has recruited Keith Gregg, formerly head of sales and marketing at San Diego-based investment advisory Dunham & Associates, to become president of First Allied, home to almost 90% of AEFC's affiliated broker force.

Prior to joining Dunham about two years ago, Gregg was head of sales for Wachovia Securities Financial Network, Wachovia's support platform for independent advisors.

"Keith is a marketing guy," says Marks, who worked with Gregg at Wachovia. "He knows how to communicate and how to get things done."

Gregg says his role at First Allied is to help advisors bridge "the huge chasm between investment advisory and wealth management. And that's what we're doing here," he adds. "When you look at who's doing what out there you can see very few if any [firms that are] providing these unique services. It's really about enabling our advisors to differentiate themselves in a market where most of the other players look very much alike."

AEFC's affiliated advisors have more than $30 billion in client assets. -FWR

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