The stiff competition to recruit brokers in the financial industry was among the topics addressed by
Ameriprise Financial Chief Executive James Cracchiolo on the company’s earnings call recently, Advisor Hub reports.
Cracchiolo told analysts that Ameriprise’s roster of 10,368 brokers increased 1% from 10,258 one year ago. The firm added 71 experienced brokers this quarter across its employee and independent channels, up from 52 the previous quarter and 64 in the same quarter one year ago.
But he acknowledged the strong competition from other firms in hiring and recruiting, and said that some of them appear to be overpaying to attract financial advisors to their ranks.
“I do believe that with the markets and other things, that people are paying up a bit more today than maybe is appropriate,” Cracchiolo said, while adding that Ameriprise is satisfied with its own recruiting strategy. “We feel good about what we’re doing and how we’re doing it,” he said.
Ameriprise, based in Minnesota, has 2,212 advisors in its employee channel, up 5% year-over-year, and 8,156 franchisees, flat from a year ago.
Financial arrangements including competitive bonuses and loans have been among the recruiting tactics utilized by firms, through Cracciolo said the bonuses would eventually be limited by rising interest rates.
“I do believe that the market is very competitive and some of the competitors are actually, I think, being a little more irrational in that regard,” he said. “So, we’re much more focused on quality people that really think about where they need to associate.”
He said annual revenue generated per advisor increased 11% year-over-year to $997,000 from $901,000. Overall, profit at Ameriprise’s Advice and Wealth Management unit rose to $826 million, an increase of 13% from last year.
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