MEDIA REVIEWS - June 16-23, 2010

Despite Investment Advisor's strong orientation toward promoting the independent broker-dealer community and serving as its mouthpiece, Financial Planning magazine's annual broker-dealer survey is consistently much more comprehensive and interesting. You get the feeling that IA's editors weed out anything in the data that one or another BD executive would rather the field force not hear about, while the FP editors seem to be looking for issues and anomalies.

Case in point? FP notes that only three independent BDs showed revenue growth in 2009, and highlighted some firms which experienced dramatic decreases in revenue. In addition, it highlights how few firms still generate more than half their total revenues via fees; annuity commissions, in most cases, trump "fee-based" revenues, which may explain why the Financial Services Institute seems so alarmed whenever Congress or the SEC talk about a fiduciary standard.

Meanwhile, the most interesting article in this issue is an analysis of two advisors who are buying small independent accounting firms. By far the majority of accounting firms are solo practices, whose owners face the same issues that advisors are facing: where do I find a successor? The firms are small enough to be purchased at reasonable cost and via some kind of earnout arrangement; more importantly, the acquiring advisory firm can begin to introduce a broader range of services to the accounting firm's clients. You buy a profitable business and then expand the revenues--and take care of the founding accountant's clients when he/she retires.

The subject of the day, in practice management, is client segmentation and determining your ideal client. Both John Bowen and Gabriel Garcia (previewing an upcoming Schwab white paper) shed some interesting new light on how, exactly, to accomplish this in your own practice.