Slideshow FP50 2018: Top 10 IBDs with the fastest-growing payouts for advisors

Published
  • July 23 2018, 11:26am EDT
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The independent broker-dealers dropping the most financial advisors from their head counts have also boosted their average payouts more than any other firms.

Northwestern Mutual, John Hancock’s Signator Investors and MassMutual’s MML Investors Services each made the top 10 for reps lost or terminated and the fastest-growing payouts in 2017, according to data collected through Financial Planning’s annual FP50 survey. Seven firms in all made both lists.

The findings provide the latest evidence that IBDs are cutting their head counts to focus on their most productive advisors in an effort to drive revenue. For example, Waddell & Reed Financial and HD Vest Financial Services dropped a net total of nearly 900 advisors combined while phasing in productivity requirements.

Firms with payouts on the rise have also been making moves fueling the industry’s record M&A activity. MML Investors added a net 3,524 advisors through the completion of MassMutual’s acquisition of the MetLife Premier Client Group. Advisor Group will purchase Signator from Hancock later this year.

A list of the IBDs with the highest average payouts, which is the amount of revenue retained by advisors net of their payments to the IBD, would look much different from a list of firms with the fastest-growing payouts. One major firm, Ameriprise, also didn’t disclose its payouts as part of the survey.

Commonwealth Financial Network returned the highest reported payout to its advisors in the IBD space each of the past three years. Its 2017 average payout of $512,000 is at least double that of each of the firms on the top 10 fastest-growing payouts list, except for The Strategic Financial Alliance.

Strategic Financial, which is the No. 52 IBD by revenue, also had the industry’s third-highest payout. The Atlanta-based firm’s revenue rose by 16% to nearly $50 million in 2017 while its number of producing representatives ticked down by 2% to 125 reps.

To see which firms’ payouts have increased the most in the past year, click through our slideshow. For a list of the firms with the highest total revenue, click here. And to view a recap of 2017 in the IBD space, see FP50 2018: Independent broker-dealers adapt to survive.

Securian Financial Services

2017 revenue: $346,400,000
2017 revenue rank: #20
Average payout: $237,000
Payout rank: #13
% change in payout year-over-year: 13.4%
% change rank: #10

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The Strategic Financial Alliance

2017 revenue: $49,873,000
2017 revenue rank: #52
Average payout: $329,000
Payout rank: #3
% change in payout year-over-year: 17.41%
% change rank: #9

Voya Financial Advisors

2017 revenue: $429,304,000
2017 revenue rank: #15
Average payout: $188,000
Payout rank: #26
% change in payout year-over-year: 17.47%
% change rank: #8

Northwestern Mutual

2017 revenue: $945,412,000
2017 revenue rank: #6
Average payout: $134,000
Payout rank: #33
% change in payout year-over-year: 19.0%
% change rank: #7

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PlanMember Securities

2017 revenue: $85,648,000
2017 revenue rank: #47
Average payout: $131,000
Payout rank: #34
% change in payout year-over-year: 20.6%
% change rank: #6

HD Vest Financial Services

2017 revenue: $348,620,000
2017 revenue rank: #19
Average payout: $59,000
Payout rank: #43
% change in payout year-over-year: 23.0%
% change rank: #5

Waddell & Reed Financial Advisors

2017 revenue: $476,612,000
2017 revenue rank: #13
Average payout: $202,000
Payout rank: #20
% change in payout year-over-year: 26.9%
% change rank: #4

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Principal Securities

2017 revenue: $299,570,000
2017 revenue rank: #22
Average payout: $96,000
Payout rank: #38
% change in payout year-over-year: 29.1%
% change rank: #3

MML Investors Services

2017 revenue: $1,050,377,000
2017 revenue rank: #5
Average payout: $76,000
Payout rank: #42
% change in payout year-over-year: 30.4%
% change rank: #2

Signator Investors

2017 revenue: $423,282,000
2017 revenue rank: #16
Average payout: $164,000
Payout rank: #28
% change in payout year-over-year: 33.7%
% change rank: #1