Given how they marry intimacy to scale, perhaps it is no surprise that in recent years, large regional advisory hubs known as offices of supervisory jurisdiction have proven increasingly popular.
“Super OSJs have become another flavor of independent ice cream,” says Danny Sarch, founder of recruiting firm Leitner Sarch Consultants Ltd. in White Plains, N.Y. “They attract advisors who want to join a familiar group of people, who want independence but also want the camaraderie of a corporate structure.”
That is certainly the case at broker-dealer LPL Financial, where, over the past four years, the largest portion of new recruits has chosen to move to the broker-dealer through its super OSJs, says Steve Pirigyi, LPL’s executive vice president of business development.
“In the bigger picture, people are attracted to LPL because of our scale,” Pirigyi says. “But one of the things they always ask is, ‘Will I feel a part of a community?’”
SMALL COMPANY FEELING
“We always tell people that they are independent but they are not alone,” says Dave Hubbard, whose firm is part of the Cetera Advisor Networks LLC.
His super OSJ has 110 financial advisors, up from 10 in 1992. Hubbard also helps oversee another five large OSJs for Cetera.
He finds that the chance to affiliate with a region helps with recruiting.
“We have a small-company feeling. People build friendships,” Hubbard says.
“It’s the best of both worlds. You have the big company back office to handle the compliance, the due diligence, and, if there’s a problem, they call me, and I’m one phone call away from the CEO,” Hubbard says.
“I can act like the cavalry and get things fixed,” he says.
The promise of that kind of help was what prompted Marzano Capital Group to affiliate with LPL Financial through one of its regional offices.
The firm, which has $300 million in assets under management, recently joined one of LPL’s regional “communities,” the super OSJ Independent Advisor Alliance, a network of 50 LPL-affiliated advisors.
“It allows us to continue to grow our business and outsource some of the functions that bog us down on a monthly basis,” managing principal Jon Marzano says.
Linking with Independent Advisor Alliance “is allowing us to continue to expand here in our market,” he says.
Marzano and his father, Arthur Marzano, who is the president of the firm, founded their Clemmons, N.C.-based practice in 2005.
It has three advisors, plus a support staff of two, and they plan to open a second office in Winston-Salem.
Independent Advisor Alliance will help Marzano with compliance and back-office tasks to free the firm’s principals to work more closely with clients, says Robert P. Russo, the network’s founder.
All the advisors affiliated with Independent Advisor Alliance, who collectively manage $1.5 billion in client assets, receive that “concierge level of service,” Russo says. “We offer what we call a flat-dollar fee for the services provided, or we offer a basis-point fee for the advisors.”
Professional camaraderie among the advisors in the network is key. They all bounce ideas off each other and constitute a smaller community within the larger LPL universe of 14,000 advisors.
Hubbard says he would be happy to borrow a few strategies from LPL’s playbook.
“One thing they do that is better is they will have their corporate recruiters recruit back to their OSJs. I have to do all the recruiting myself,” Hubbard says.
“Most of the [Cetera’s] regions don’t have full-time recruiters. That’s a big difference,” Hubbard says.
“Frankly, I would like that,” he says.
This story is part of a 30-day series on how to prosper as an advisor. It was originally published on Oct. 1, 2015.
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