With market cooking, Ameriprise advisors see boost in revenue

investmentnews.com:

Financial advisors appear to be shaking off the pain of the bear market that ended last month, as financial results released Wednesday after the close by Ameriprise Financial Inc. indicate; the firm’s 10,274 financial advisors saw a year-over-year increase of 7.4% in productivity as measured by revenue, a sign of advisors’ resiliency after 2022 saw the S&P 500 stock index fall by 18%.

Ameriprise Financial reported adjusted operating net revenue per financial advisor of $874,000 at the end of June, compared to $814,000 a year earlier, an increase of 7.4%. That’s a 3.2% increase from March, when Ameriprise reported net revenue per advisor of $847,000.

Terms such as “revenue per advisor” at brokerage firms like Ameriprise are synonyms for “gross dealer concession,” industry shorthand meaning the total fees and commissions an advisor generates from clients in a 12-month period. Financial advisors who are employees typically keep 40 cents per dollar of revenue, with the firm taking the rest; those who are independent contractors typically keep in the neighborhood of 80 cents per dollar of revenue.

Ameriprise has 2,108 employee financial advisors and 8,166 so-called franchise advisors, who work as independent contractors. Not all firms report average revenue per advisor.

Over the first half of the year, the S&P 500 stock index was up more than 15%, so the bump in revenue per advisor was both to be expected and welcome, one industry recruiter noted.

“With hindsight, the bear market made clients appreciate their financial advisors more, and firms that are pure wealth management operations reflect that,” said Danny Sarch. “The best financial advisors do a good job of talking their clients off the edge when the market hits