The New Year finds the Financial Services Institute optimistic and on a roll.
That was the message at a morning meeting with various members of the media and FSI leadership at the advocacy organization's 2013 OneVoice conference in San Diego on Tuesday.
Dale Brown, FSI's president and CEO, began by noting the organization's "three-legged stool" to increase revenue. The first was a concerted effort to double membership by having financial advisors join at a reduced cost. This resulted in a 70% renewal rate, on average, over the past four months, he claimed. The second was that "some broker-dealer firms saw a significant increase in their dues in 2012," which Brown said was the reason some firms were lost, but also the reason for a significant increase in revenue.
The third leg of the stool was the sponsor companies that have joined FSI, now totaling 98 companies in 2013.
"Bottom line—we are stronger than ever before," he said. "Firms need our voice, which is their voice collectively."
The organization noted at the meeting's outset that in 2010, FSI's budget was $3.5 million. In 2013, it is projected to be more than $7 million.
As for membership, FSI have over 100 firm members, with projected revenue of $1.7 million in 2013—and 87% increase from 2011.
Under the heading of financial advisor membership, the organization noted there are now 20 firm members who have fully subsidized FSI membership to all of their advisors. An additional 33 firms facilitate membership for their financial advisors by offering commission deduction for dues. All together, these 53 firms account for nearly all financial advisor members.
FSI also noted that in 2012, it had 88 sponsors generating $1.3 million in revenue. In 2013, it has 98 sponsors and over $1.8 million in revenue—and 80% increase over 2011 and a nearly 40% increase in revenue over 2012.
FSI 2013 Chairman Larry Roth, CEO of AIG Advisor Group, argued that the reason for the organization's success has not only been the quality of the broker-dealer membership, but also because broker-dealers are more committed, are bringing more people, and are more involved.
"We've been able to offer friendly competitors and opportunity and forum for idea sharing," he said. "And it's the same with our sponsors."
FSI's efforts are "making life—I was going to say easier—but more tolerable," he added. "Interest rates are low and margins are thin. But we have members, vendors and advisors all aligned around FSI's agenda. We have the full support of all of our members."
Vice Chairman Mike Mungenast, president and CEO of ProEquities, noted the importance of having a diverse membership as well.
"They come under the heading of IBD, but they are all different," Mungenast said. "It's important to understand how what we do impacts people at the smallest level of their broker dealer and advisor business. Profitability is a tough business at the moment, interest rates are low, but their all going through it—both large and small." He added that the organization is excited about its new members, but it is also excited about its retention of existing members.
"For advisors, it's a complex world," he said. "For example, the Department of Labor's fiduciary rule; advisors want to do what's right for their clients, but they also feel like they're getting distracted. As a result, they become more engaged."
