Retail Brokerage Winter 2011 Quarterly Report

Non-discretionary fee-based brokerage account (FBB) programs are on a roll, crossing the $100 billion mark by the end of last year and now accounting for one out of every seven dollars under the care of full-service brokerage advisors. This growing asset base and importance reflects FBB’s central role in the ongoing shift towards greater reliance on fee-based compensation models in the full-service brokerage channel. With eight out of every 10 advisors using the FBB account structure in their practice, FBB is the bedrock of the fee-based business in the channel. The feature research article in the current issue of The Retail Brokerage Report pinpoints the reasons behind FBB’s ascent to prominence. The focus is on how the macroeconomic factors and competitive developments of the past few years have reshaped the economic realities for brokerage firms and individual advisors alike, prompting an attitudinal change in the acceptance of fee-based models. A discussion of top-line issues is complemented by a definitive survey of the key aspects of the FBB market—its competitive field, advisor and asset base penetration measures, account growth, asset mix and pricing structures. Special focus is given to the progress of mutual funds and ETFs in the FBB space. The article is a must-read for all firms impacted by or looking to benefit from the growth momentum of FBB programs.