PA NC: The Future of the Wirehouse Adviser

“This business is clearly moving in the direction of consulting,” noted Patrick Rieck, First VP National Sales Director 401(k) Products at Smith Barney. Rieck said a challenge for wirehouses is to help advisers transition to a consulting business model.

According to Rieck, the only edge independent advisers may have in the market is the fiduciary role, something wirehouses may need to get more comfortable with. Panel members all agreed the key element for the wirehouse adviser’s business is home office support.

Kerry Sain, SVP, Director of Sales at Wachovia Retirement Services, said advisers come to a wirehouse for the brand recognition and for buying leverage, so the home office has a duty to advisers to continue to reinvest in the business and provide tools for the advisers. Sain warned there is serious competition with independent registered investment adviser (RIA) entities.

She suggested that spending on marketing will help wirehouse advisers compete with their independent couterparts. In addition, according to Sain, wirehouses should allow more flexibility to advisers, be more nimble, and less bureaucratic. Rieck agreed and said wirehouses should stay current and continue to put resources into the 401(k) market.

While panel member Pat Oberlander, Director, Qualified Plans at UBS Retirement Consulting Services, noted that wirehouse advisers are “surprisingly self sufficient,” he also said the home office should provide technology support and more communication and delivery of products and services to advisers in the field.

However, to be competitive and win business, Oberlander suggested wirehouse advisers should articulate to clients and prospects the advantages of using a wirehouse, such as a known brand and additional regulations that protect the public, which both will give sponsor’s plan participants a certain comfort level.