SEI has a new strategy for boosting 2010 sales and an analyst calls it a 'grand slam'

The SEI Advisor Network signed on 250 new registered investment advisors, increased assets under management to nearly $30 billion and generated $4.5 billion in new assets in 2009, according to a release from the company.

The number of new advisors that joined the turnkey asset management program of SEI represents a more than 40% increase from 2008. Assets increased from $28 billion at the end of 2008.

Most of those new advisors came to the Oaks, Pa.-based TAMP in 2009 because another advisor referred them.

But in 2010, SEI is hoping that a new program it launched in January will drive business from the industry’s most important centers of influence – the independent broker-dealers where most of its advisor clients are affiliated.

National team

SEI’s new program is run by a national team of four individuals whose sole purpose is to support IBDs on behalf of the company, according to Wayne Withrow, executive vice president of SEI and the head of the SEI Advisor Network.

They will accomplish this task by helping them manage data and information for compliance. The team will also help broker-dealers to deliver practice management expertise aimed at growth and help IBD staff to better understand how to use SEI’s TAMPs.

There’s a reason that Withrow believes that the new program will be well-received by broker-dealers.

“If IBDs see us growing their advisors, that’s new growth for the broker-dealer also,” he says.

Grand slam

Charles “Chip” Roame, managing principal of Tiburon Strategic Advisors, says that SEI’s strategy of helping broker-dealers to help their reps is a “grand slam.”

“Keeping the firms (IBDs) happy is key to tapping into their reps,” he says.

SEI may be able to make a big difference for the IBD market because of how fragmented it has become — and how much potential it has to grow, according to Roame.

“The IBD market, unlike the RIA custody market, is still quite disparate,” he says. “There are leaders like LPL and Raymond James but consolidators — ING, AIG, Pac Life — have unraveled and hence their IBD reps are dispersed more widely. And there are dozens of IBDs with 200-500 reps, all of which have some impressive producers. Plus the trend into the market is really more into the mixed fee and commission model suggesting that IBDs will grow further.“

Overarching factors

There are also some overarching factors behind the improvements in SEI’s business, Withrow says.

First, advisors are looking for ways to make money for their clients again after a rough economic stretch.

“In response to the recent downturn, they’re looking for growth,” he says.

Second, they’re looking for a relatively conservative way to pursue growth.

Tails to that head

“The tails to that head [of seeking growth] is the whole concept of [mitigating] risk,” he says. “In the good times, it’s only about growth.”

SEI takes away most balance sheet risk by keeping little long-term corporate debt and by keeping assets in a trust company, which also insulates client accounts from balance sheet risk, Withrow says.