Optimizing Advisor Territories and Book Size
To celebrate over 40 years of thought leadership, Kehrer Group is revisiting some of its landmark studies and insights, and we’re asking some members of the financial advice community to provide their take on the impact of the work.
Over the years we had provided insights about best practices in investment services by comparing the performance of institutions across a range of issues – advisor coverage, referral penetration, etc. We understood the shortcomings of those analyses, because there are many differences among financial institution-based firms besides the characteristics we could include in our analysis, so we our insights might be misleading. And, at heart, we were interested in understanding the behavior of advisors, not just their firms. For both those reasons, we wanted to analyze data on individual advisors, which would empower multivariate analysis at the individual advisor level. That would increase our confidence that our practice management insights are correct.
But this would require many firms to provide a substantial amount of data on each of their advisors, including date of hire, advisory and transaction GDC and AUM, size of deposit territory, number of clients, share of wallet, etc. Arthur Osman, then director of financial institution relationships at LPL, shared that vision, and was able to muster LPL data on 1,213 individual financial advisors from 118 banks and credit unions.
This particular research project I hold near and dear, as it really forged forward the precise thinking and guidance on how and when to reduce opportunity costs associated with “career branch advisors”. Sales managers and program directors have historically flied blind to the know-how and understanding of when to pair back the territory size and book size for branch-based advisors……without negatively disrupting their opportunity and desire to maintain and grow their productivity. Now, leaders and managers have the science, they have the guidance and roadmap to make decisions that strike the right balance between maintaining productivity levels and growth trajectories of financial advisors, while systemically optimizing the territory and book sizes for advisors such that they reduce and eliminate the opportunity costs of “thin coverage”. This is the report that defines what optimal coverage looks like and how and when to optimize!
Optimizing Advisor Performance: How to Determine the Optimal Branch Deposit Territory and Number of Clients
About Kehrer Group Highlighters
The Kehrer Group Highlighters package some of our most important findings, insights, and commentary into bite-size, digestible articles. We make the Highlighters available for free to the entire financial advice community—a small gesture of appreciation for a community that has done so much to support our work.
About Kehrer Group
Kehrer Group is the bank and credit union financial advice community’s trusted partner for original thought leadership, insight based on data, and strategies that drive success. Kehrer Group’s legacy of research and analysis has advanced the delivery of investment services in banks and credit unions and shaped the industry into what it is today. Kehrer Group’s principals meld the wisdom gained from its long history in the industry with cutting-edge analytics, data that is robust and diverse, and a deep understanding of the key drivers of performance.
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