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IBD Elite 2020: Top 10 firms with the fastest growing payouts

For a sign of how independent broker-dealers are navigating dramatic change, look no further than their financial advisor payouts.

The list below ranks the top 10 fastest growing payouts among firms participating in Financial Planning’s IBD Elite survey. No matter their size, they share one goal: Recruiting and retaining the most productive advisors, even as the RIA movement poses a competitive threat.

These firms look to lure — and keep — new advisors with greater independence and higher payouts, compared to wirehouses and other employee BDs. Even so, RIA platforms and consolidators have the upper hand when it comes to some breakaway advisors and other planners who question how much of their practice’s revenue goes back to the home office, despite the IBD services they receive.

The struggle for advisors is ramping up as advisory business represents a higher share of IBD revenue each year. In 2019, some $15 billion in fees represented 48% of the sector’s $31.2 billion. IBDs are racing to keep up with the shifting needs of advisors and clients. The challenge remains finding the level of support and revenue for thousands of individual advisors at once.

In terms of the highest average payout in the sector, Commonwealth Financial Network has disclosed the largest sum in each of the past five years. Raymond James Financial Services and Geneos Wealth Management have joined Commonwealth among the top three in each of the past two years.

A trio of three other firms made the top 10 average payouts as well as reporting the highest percentage increases last year: Arkadios Capital, Waddell & Reed and Prospera Financial Services. An Advisor Group IBD pushed up its average payout more than any other firm.

Firms with soaring payouts have boosted their revenue significantly or cut lower producers. Some large firms didn’t even disclose the closely watched metric. Payots differ from one firm to another and within them, based on total production and the product or service sold to the client. Advisors also vary in how much they’re willing to pay to avoid tasks like real estate and payroll.

To see which firms’ payouts rose by the highest percentage in 2019, scroll down our cardshow. For last year’s list, click here.

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Northwestern Mutual Investment Services
2019 total revenue: $1,351,248,000

IBD Elite total revenue rank: #7

Producing representatives: 5,112

Total payout: $962,999,000

Payout as % of annual revenue: 71%

Average payout: $188,000

% change in payout year-over-year: 9.75%

% change rank: #10
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Packerland Brokerage Services
2019 total revenue: $23,665,000

IBD Elite total revenue rank: #50

Producing representatives: 243

Total payout: $23,445,000

Payout as % of annual revenue: 99%

Average payout: $96,000

% change in payout year-over-year: 10.23%

% change rank: #9
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Prospera Financial Services
2019 total revenue: $57,580,000

IBD Elite total revenue rank: #44

Producing representatives: 129

Total payout: $43,747,000

Payout as % of annual revenue: 76%

Average payout: $339,000

% change in payout year-over-year: 14%

% change rank: #8
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Advisor Group
2019 total revenue: $3,363,471,000

IBD Elite total revenue rank: #3

Producing representatives: 10,391

Total payout: $2,545,643,000

Payout as % of annual revenue: 76%

Average payout: $245,000

% change in payout year-over-year: 18.60%

% change rank: #7
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Ameritas Investment
2019 total revenue: $150,200,000

IBD Elite total revenue rank: #30

Producing representatives: 846

Total payout: $114,767,000

Payout as % of annual revenue: 76%

Average payout: $136,000

% change in payout year-over-year: 19.32%

% change rank: #6
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Waddell & Reed Financial Advisors
2019 total revenue: $513,832,000

IBD Elite total revenue rank: #15

Producing representatives: 939

Total payout: $344,610,000

Payout as % of annual revenue: 67%

Average payout: $367,000

% change in payout year-over-year: 21%

% change rank: #5
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Arete Wealth
2019 total revenue: $36,506,000

IBD Elite total revenue rank: #47

Producing representatives: 94

Total payout: $24,787,000

Payout as % of annual revenue: 68%

Average payout: $264,000

% change in payout year-over-year: 31.62%

% change rank: #4
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Arkadios Capital
2019 total revenue: $24,611,000

IBD Elite total revenue rank: #49

Producing representatives: 54

Total payout: $18,383,000

Payout as % of annual revenue: 75%

Average payout: $340,000

% change in payout year-over-year: 32.39%

% change rank: #3
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H. Beck
Parent: Kestra Financial

2019 total revenue: $112,135,000

IBD Elite total revenue rank: #36

Producing representatives: 448

Total payout: $106,405,000

Payout as % of annual revenue: 95%

Average payout: $238,000

% change in payout year-over-year: 43%

% change rank: #2
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Royal Alliance Associates
Network: Advisor Group

2019 total revenue: $961,063,000

IBD Elite total revenue rank: #10

Producing representatives: 2,888

Total payout: $822,702,000

Payout as % of annual revenue: 86%

Average payout: $285,000

% change in payout year-over-year: 78%

% change rank: #1