Expand the Sales Force? Not Smith Barney
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Contrary to other large wirehouses, Smith Barney does not plan on aggressively expanding its sales force at this time, according to Sallie Krawcheck, CEO of Smith Barney.
Krawcheck, speaking at the Investment Management Consultants Association conference in Boca Raton, Fla., in May, said the firm intends to maintain its staffing level — currently about 12,500 financial advisors.
The firm, however, does have a similar strategy as other firms — capturing more of the client's wallet through the use of open architecture, stronger investment research and a diversified product offering.
Sound familiar? Krawcheck thinks so.
“I wish I could tell you we're saying something different — we all say the same thing,” she said in an interview. “However, we are gravitating towards different things. The key difference is that everyone else is looking to hire and recruit aggressively, and we're looking to invest more in the FCs.”
Is keeping the sales force stable, when others are ramping up, a wise strategy? That remains to be seen. Smith Barney is the second-largest b/d.
The firm remains focused on increasing rep productivity, part of the stated goal of having the entire sales force average $1 million in production annually within three years time — known as the “March to a Million” strategy. That has been tweaked, to some extent, to make it clear that all advisors' goal is to double their business.
“We were saying [a year ago] when we were at $400,000 that we wanted to do this, and I still believe we'll get there,” she said.
With regard to the firm's investments in the current workforce, Krawcheck said Smith Barney's plans include more money directed towards branch manager training, wealth management system platforms and team-based approaches. She declined to get more specific, but there were a few clues in her IMCA address, including a citation of internal firm research showing productivity for financial advisors doubles when they become part of a team.
“The idea is to double your business,” said one Smith Barney rep. “We want average production to go from $500,000 to $1 million, but that made it seem like all the pressure was on the lower-end people. That's the whole part of the focus on teams, though.”
With IMCA's focus being on raising the level of competency of investment consultants, who do highly specialized work with affluent clients, Krawcheck said in an interview that there isn't a split in her firm between those who do commission work and those who do consulting-type work.
“About 84 percent of consultants have one or two Consulting Group relationships,” she said. “Is there still opportunity? Sure — we'd like to see 90 percent doing this business next year. But we absolutely don't have two separate sales forces.”
