Retail Brokerage Summer 2012 Quarterly Report

Although full-service brokerage revenue and assets have surpassed pre-downturn highs on an industry-wide basis, improving on profit margins from that period has been challenging.  Rising operating costs – in particular, advisor compensation –are creating the biggest impediment to progress. Despite this, managing the compensation model has emerged as a key strategic and tactical tool to influence and direct advisor behaviour. The Summer 2012 edition of the Retail Brokerage and Distribution Advisory Service addresses the issues surrounding the current advisor compensation model and it’s effect on maintaining profitability and achieving strategic objectives. The detailed analysis reveals some facts and dispels some myths that will cause a re-think of current practices. The story is essential reading for industry executives, industry association members, regulators and others looking to understand the role of compensation in both the profit outlook of the business and the opportunity and challenge facing advisors.