A Royal Welcome for One Thousand
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LAS VEGAS — If the Royal Alliance National Education Conference is any indication, independents are thinking one thing: The time to strike at wirehouses is now.
The annual conference, held in late May at the MGM Grand in Las Vegas, welcomed nearly 1,000 financial planners affiliated with Royal Alliance, an independent broker/dealer subsidiary of AIG. The message, repeated relentlessly in the opening session, was that the Wall Street wirehouses are wobbling in the wake of the historic settlement with New York Attorney General Eliot Spitzer — which fined 10 Wall Street firms $1.4 billion (with potentially crippling arbitration cases looming).
In the view of independents like Royal Alliance, that spells unprecedented opportunity for more loosely affiliated broker/dealers — who tend to focus more on financial planning than on stock-trading — to win the hearts (and wallets) of millions of clients.
In his address, Mark Goldberg, president and CEO of Royal Alliance, noted that 64 percent of Royal Alliance's new clients come directly from the wirehouses. Even those not fingered in the settlement were not spared; Goldberg saved some of his strongest vitriol for Charles Schwab Co.
“The wirehouses just don't care about clients,” he said. “For that reason, the game is over. We've won. We're in position to collect the rewards of this victory for some time.”
Royal Alliance has grown considerably in the past year, swelling to 2,800 reps at the end of 2002, a 17 percent increase since the hot-dot days of 2000. Goldberg scoffed at wirehouses' attempts to “transform” themselves from stock pickers into financial planners. “It's amazing to me how much the wirehouses just don't get financial planning,” he said. “This is our field, and our game, and we are winning.”
Jay Wintroub, president of AIG/SunAmerica, emphasized that Royal Alliance will remain its own entity and not merge with any other AIG affiliates — of which AIG has five others. There was some speculation that when AIG did a management consolidation some months ago that the broker/dealers would eventually be merged into one unit, all taking the AIG name.
