A list of the top brokerdealers in each of the. categories that matter most

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1 By John Sullivan T 78 Investment Advisor June 20 AdvisorOne.com Illustration: McMillan Digital Art A list of the top brokerdealers in each of the categories that matter most o say it s a time of flux in the broker-dealer and independent advisory industries doesn t do it justice. Compliance, fiduciary standards, succession planning, margin squeeze not to mention lawsuits related to Medical Capital and other poorly thought-out products all mean more for BDs and reps to think about in addition to the baby boomer retirement, recovery from the worst global financial crisis in history and... oh yeah, the day-to-day pressures of running a business. With all that in mind, which broker-dealers are thriving, which are merely surviving and which are shutting their doors? We present the 20 Broker-Dealer Reference Guide, a review of the top BDs in each major category to help you sort it all out, and ensure a lasting and profitable relationship for you and your clients. June 20 Investment Advisor 79

2 Little surprise; when we asked about the issues broker-dealer presidents feel are the most challenging to their business in the long term (next three to five years and beyond), margin squeeze took the top spot more than double the number of responses received by the next answer, which was keeping technology up-to-date. It s about as bad as it can get at this point, says Geneos Wealth Management President Russell Diachok. We certainly aren t going to raise our payouts at this point, as we re already as high as, or higher than, all but one or two other broker-dealers. by annual revenue avg. B/D gross BD total fee-based Concession revenue expenses revenue per rep RANK Company ($ mil.) ($ mil.) ($ mil.) ($ Thous.) LPL Financial $2,920.0 $2,80.0 $840.0 $ Raymond James Financial Services, Inc. $,020.0 $97.0 $33.3 $ Commonwealth Financial Network $579.6 NA $293. $ AXA Advisors, LLC $537.0 NA $74.0 $ Securities America, Inc. $466.0 NA $68.7 $ MetLife Securities, Inc. $453.7 NA $44.5 $ Northwestern Mutual $450.6 NA $49.9 $ NFP Advisor Service Group (& Affiliates) $346. NA $79.5 $ Cambridge Investment Research, Inc. $339.3 $322.9 $79.3 $8.8 0 Royal Alliance Associates $338.2 NA $24.3 $83.7 Financial Network Investment Corporation $302. $322.2 $.4 $ National Planning Corporation (NPC) $300.3 $298.5 $6.6 $ Securian Financial Services $290.5 $290. $46.7 $ Waddell & Reed, Inc. $288.9 $304.4 $60.6 $8.4 5 John Hancock Financial Network $279.6 $28.9 $22.7 $63. 6 Woodbury Financial Services $238.7 $238.7 $22. $ FSC Securities Corporation $233.6 NA $80. $ First Allied Securities, Inc. $230.5 $222.6 $60.3 $ SagePoint Financial $23.9 NA $52.4 $ Princor Financial Services $205.2 $20.7 $22.8 $ New England Securities, Inc. $205.0 NA $38.8 $ INVEST Financial Corporation $89.0 $86.9 $3.3 $ UVEST Financial Services Group, Inc. $7.0 $62.0 $6.0 $ Transamerica Financial Advisors, Inc. $39.0 NA NA $ NEXT Financial Group, Inc. $36. $34.5 $30.3 $47.7 All data is as of April, 20, and was supplied by the broker/dealers themselves; Investment Advisor has not independently confirmed the data. 80 Investment Advisor June 20 AdvisorOne.com

3 200 was seen as the year of going nowhere for independent reps, and many stayed put as their wirehouse competition crumbled. But 20 is a whole different story. Many firms saw their best first quarter (recruiting wise) in quite a while, and the trend is continuing for the full year. To what is it attributed? It s a combination of things, says Joe Richard of Wall Street Financial Group. If independents decided they wanted to make a move in 2007, 2008 or 2009, it wasn t a time you wanted to change broker-dealers. The country was in a recession and the last thing you wanted to do is go back to your clients and tell them you made a change. by number of reps reps reps firm's producing added dropped years in RANK Company reps in 200 in 200 business LPL Financial,924 NA NA 43 2 Northwestern Mutual 5,76 NA NA 43 3 MetLife Securities, Inc. 5,36,3, H.D. Vest Financial Services 4, AXA Advisors, LLC 4, Raymond James Financial Services, Inc. 3, Princor Financial Services 2, Park Avenue Securities 2,235 NA NA 2 9 Financial Network Investment Corporation, Cambridge Investment Research, Inc., Securities America, Inc.,850 NA NA 27 2 Genworth Financial Securities Corp., New England Securities, Inc., John Hancock Financial Network, Waddell & Reed, Inc., Woodbury Financial Services, NA 0 7 Royal Alliance Associates, National Planning Corporation (NPC), SagePoint Financial, NFP Advisor Service Group (& Affiliates), Commonwealth Financial Network, Transamerica Financial Advisors, Inc., Ameritas Investment Corp., PrimeVest Financial Services, INVEST Financial Corporation, All data is as of April, 20, and was supplied by the broker/dealers themselves; Investment Advisor has not independently confirmed the data. 82 Investment Advisor June 20 AdvisorOne.com

4 Here s a scary thought, and reason No. 758 why the fee-based model works: Advisors lost 40% of their revenue [in 2008 and 2009] because $0 trillion of net worth vaporized, says Frank Campanale, CEO of First Allied s Wealth Management Group. Fee-based revenue decreased by 40% overall. But transactional business fell much further because no transactions were being made. Suddenly, the transactional guys can t make their mortgages. Sure, Campanale was referring to wirehouse reps, but the sentiment translates to the independent world. Diversification is the word of the day (decade), not just for the client s portfolio, but for advisor revenue streams. Any wonder why the BDs that offer robust fee-based platforms rank at the top? by highest average production avg. annual aum in gross avg. aum fee-based excess production per advisor programs capital RANK Company per advisor ($ mil.) ($ Bil.) ($ mil.) First Allied Securities, Inc. $365,000 $72.3 $5.2 $9. 2 Commonwealth Financial Network $360,500 $8.8 $22.0 $7.9 3 Raymond James Financial Services, Inc. $33,92 $23.3 $57.5 $ VSR Financial Services, Inc. $284,3 $8.0 $3.2 $2.2 5 Geneos Wealth Management, Inc. $275,344 $30.0 $4. $3.5 6 M Holdings Securities, Inc. $274,404 $2. $.8 $0.2 7 NFP Advisor Service Group (& Affiliates) $247,249 $6.7 $9.9 $ Founders Financial Securities, LLC $227,000 $25.0 $0.3 NA 9 United Planners Financial Services $20,000 $0.2 $2.3 $4.7 0 SII Investments, Inc. $209,059 $4.4 $2.8 $6.5 FSC Securities Corporation $205,052 $0.7 $0.3 $ Prospera Financial Services $200,845 $8.3 $0.7 $.4 3 WFG Investments Inc. $200,000 $0.0 $.0 NA 4 Securities America, Inc. $95,535 $7.5 $5.8 $8.5 5 Summit Brokerage Services, Inc. $95,000 $25.0 $.0 $6.0 6 Triad Advisors $86,028 $7.0 $.8 $.7 7 Independent Financial Group $85,000 $2.0 $.7 $0.5 8 Royal Alliance Associates $83,683 $3.4 $6.0 $ Investment Centers of America, Inc. $82,335 $3.0 $.2 $ Cambridge Investment Research, Inc. $8,800 NA $22.8 $8.5 2 Multi-Financial Securities Corporation $80,834 $4.2 $3.2 $2. 22 National Planning Corporation (NPC) $73,76 $3. $5.3 $ INVEST Financial Corporation $73,38 $2.5 $2.7 $ Financial Network Investment Corporation $66,056 $5.8 $.0 $ Securities Service Network, Inc. $60,9 $6.5 $5.3 $2.2 All data is as of April, 20, and was supplied by the broker/dealers themselves; Investment Advisor has not independently confirmed the data. 84 Investment Advisor June 20 AdvisorOne.com

5 The rise of the hybrid advisor one who affiliates with a broker-dealer while simultaneously running their own RIA firm as well continues, but for how long? One thing that stands out is that the advisor s business will not grow through market appreciation simply because our analysts tell us returns will be lower going forward, Bill Dwyer, LPL Financial s president of national sales and marketing, warned in our May issue. If you couple this with lower risk tolerance, it means advisors will have to grow their practices by adding clients. The autonomy that independent advisors experienced in the 980s and 990s, almost ruggedly so, is no longer possible, Dwyer says. It s just too costly. by friendliness to rias average Cfps in years reps with total rep experience RANK Company their own ria force (per advisor) Triad Advisors 84.8% 33.9% 6 2 Park Avenue Securities 62.6% NA NA 3 Securities Service Network, Inc. 43.7% 28.6% 5 4 United Planners Financial Services 26.3% 22.% NA 5 Cambridge Investment Research, Inc. 26.% 28.4% 5 6 Securities America, Inc. 8.% 24.% NA 7 Royal Alliance Associates 6.2% NA NA 8 Pacific West Financial Group 5.9% 25.7% NA 9 American Portfolios Financial Services, Inc. 5.5%.2% 8 0 Geneos Wealth Management, Inc. 4.5% 35.3% 20 LaSalle St. Securities LLC 2.5% 8.7% 2 2 Capital Financial Group/H. Beck, Inc. 2.2% 3.8% NA 3 FSC Securities Corporation 0.9% NA NA 4 First Allied Securities, Inc. 0.7% 8.9% 8 5 Ausdal Financial Partners 0.3% 8.6% 2 6 Commonwealth Financial Network 8.9% 40.7% NA 7 Crown Capital Securities, L.P. 8.4% 22.5% 7 8 SagePoint Financial 7.9% NA NA 9 WFG Investments Inc. 6.8% 0.0% Capital Investment Companies 6.6% 0.4% NA 2 Investacorp, Inc. 6.4% NA 0 22 M Holdings Securities, Inc. 6.0% 0.7% NA 23 National Planning Corporation (NPC) 5.% NA NA 24 Independent Financial Group 4.8% 4.2% 5 25 Raymond James Financial Services, Inc. 4.8% 23.2% 9 All data is as of April, 20, and was supplied by the broker/dealers themselves; Investment Advisor has not independently confirmed the data. 86 Investment Advisor June 20 AdvisorOne.com

6 If what LPL Financial s Bill Dwyer says is true, independent broker-dealers will become the one-stop shop they ve always claimed to be. Compliance, marketing, succession planning, recruiting, practice management, transitioning, practice management questions, product questions, strategy questions, etc., all will increasingly be handled in-house. And the focus on the number, and competency, of home office personnel will increasingly be felt. Whether it s running their staff through the Ritz-Carlton customer service training program (Investor s Capital Corp.), a high rep-to-staff ratio (Raymond James, again) or measuring response times in every way possible (everyone), rep retention will come down to the quality of your home office hires. by home office support ratio of reps to home home office office staff compliance RANK Company staff staff recruiters professionals Raymond James Financial Services, Inc..3 : 2, Correll Co. Investment Services Corp..8 : Waddell & Reed, Inc. 2.2 : PrimeVest Financial Services 2.2 : Multi-Financial Securities Corporation 2.3 : First Allied Securities, Inc. 2.4 : Commonwealth Financial Network 3.0 : WFG Investments Inc. 3.3 : Prospera Financial Services 3.5 : PlanMember Securities 3.8 : Investment Centers of America, Inc. 3.9 : Sammons Securities Company 3.9 : VSR Financial Services, Inc. 4.2 : Summit Brokerage Services, Inc. 4.5 : Berthel Fisher & Co. Financial Services, Inc. 4.5 : F500 Advisory Services, Inc. 4.8 : Securities America, Inc. 4.8 : Cambridge Investment Research, Inc. 4.8 : LPL Financial 5.0 : 2,399 NA Financial Network Investment Corp. 5.0 : UVEST Financial Services Group, Inc. 5.4 : 96 NA Founders Financial Securities, LLC 6.0 : Signal Securities, Inc. 6.0 : Geneos Wealth Management, Inc. 6. : SagePoint Financial 6. : All data is as of April, 20, and was supplied by the broker/dealers themselves; Investment Advisor has not independently confirmed the data. 88 Investment Advisor June 20 AdvisorOne.com

7 INVESTMENT ADVISOR S directory of independent broker/dealers for more information... American Portfolios Financial Services, Inc. (686 reps) Ameritas Investment Corp. (,330 reps) Ausdal Financial Partners (204 reps) AXA Advisors, LLC (4,504 reps) Berthel Fisher & Co. Financial Services, Inc. (350 reps) Cadaret, Grant & Co., Inc. (80 reps) Cambridge Investment Research, Inc. (,90 reps) Capital Financial Group/H. Beck, Inc. (903 reps) Capital Investment Companies (82 reps) Centaurus Financial, Inc. (623 reps) Commonwealth Financial Network (,375 reps) Correll Co. Invest. Services Corp. (7 reps) Crown Capital Securities, L.P. (320 reps) F500 Advisory Services, Inc. (72 reps) Financial Network Investment Corporation (,922 reps) First Allied Securities, Inc. (673 reps) Founders Financial Securities, LLC (60 reps) FSC Securities Corporation (,050 reps) GBS Financial Corp. (75 reps) Geneos Wealth Management, Inc. (275 reps) Genworth Financial Securities Corp. (,769 reps) H.D. Vest Financial Services (4,770 reps) Harbour Investments, Inc. (9 reps) Independent Financial Group (45 reps) INVEST Financial Corporation (,084 reps) Investacorp, Inc. (440 reps) The Investment Center, Inc. (305 reps) Investment Centers of America, Inc. (35 reps) Investors Capital Corporation (530 reps) investorscapital.com J.W. Cole Financial, Inc. (285 reps) John Hancock Financial Network (,740 reps) Kovack Securities, Inc. (296 reps) LaSalle St. Securities LLC (289 reps) LPL Financial (,924 reps) M Holdings Securities, Inc. (503 reps) MetLife Securities, Inc. (5,36 reps) Multi-Financial Securities Corporation (792 reps) National Planning Corporation (NPC) (,446 reps) New England Securities, Inc. (,767 reps) NEXT Financial Group, Inc. (893 reps) NFP Advisor Service Group (& Affiliates) (,383 reps) Northwestern Mutual (5,76 reps) The O.N. Equity Sales Company (73 reps) Pacific West Financial Group (296 reps) Park Avenue Securities (2,235 reps) PlanMember Securities (378 reps) PrimeVest Financial Services (,20 reps) Princor Financial Services (2,39 reps) ProEquities, Inc. (950 reps) Prospera Financial Services (06 reps) Questar Capital Corporation (67 reps) Raymond James Financial Services, Inc. (3,96 reps) Royal Alliance Associates (,59 reps) Investment Advisor June 20 AdvisorOne.com

8 INVESTMENT ADVISOR S directory of independent broker/dealers for more information...(continued) SagePoint Financial (,408 reps) Sammons Securities Company (45 reps) Securian Financial Services (,035 reps) Securities America, Inc. (,850 reps) Securities Service Network, Inc. (444 reps) Signal Securities, Inc. (66 reps) SII Investments, Inc. (576 reps) Summit Brokerage Services, Inc. (340 reps) Tower Square Securities, Inc. (39 reps) Transamerica Financial Advisors, Inc. (,347 reps) tfa.transamerica.com Triad Advisors (48 reps) United Planners Financial Services (33 reps) UVEST Financial Services Group, Inc. (520 reps) VSR Financial Services, Inc. (303 reps) Waddell & Reed, Inc. (,73 reps) Wall Street Financial Group (60 reps) Walnut Street Securities, Inc. (644 reps) WFG Investments Inc. (25 reps) Woodbury Financial Services (,550 reps) WRP investments, Inc. (369 reps) Investment Advisor June 20 AdvisorOne.com