SEI Quick Poll: Broker-Dealers See More Technology and Complexity in the Future

Industry Summit Findings Indicate Move Toward Consolidation, Packaged Solutions

OAKS, Pa., Aug. 1 /PRNewswire-FirstCall/ -- If they had an extra $100,000 to invest in their businesses, most broker-dealers would spend it on technology, reports a Quick Poll from SEI (Nasdaq: SEIC). The survey revealed that 62 percent of broker-dealers (BDs) surveyed would invest additional money in technology automation and integration. Additionally, 27 percent stated that offering best-of-breed technology was a key selling point to advisors.

The survey was part of "The Power of Three," SEI's first annual summit for BDs and the latest in an educational series created by SEI to encourage thought leadership throughout the financial advice industry. The two-day conference was comprised of industry presentations and break-out sessions on topics such as advisor segmentation, barriers to growth, evolution of technology and practice management. Twenty-five attendees from some of the largest national BD firms were asked to share their thoughts on the industry's recent past and impending future, such as:

How does the industry differ from five years ago vs. today?

Attendees noted that advice, not commissionable products, is driving the industry; 67 percent stated that they were now more open to fee-based programs. Not surprisingly, BDs also expressed that increased regulatory scrutiny has significantly affected operations, along with a shifting focus from providing products to assuming more fiduciary responsibilities.

What does the industry look like in 2010?

Further industry consolidation was a universal prediction, with fewer and larger players dominating the marketplace. BDs felt that as products become more commoditized, the industry will continue to move toward holistic planning and advice. Attendees also stated that increasing compliance complexity and market environments will drive greater need for stronger relationships with broker-dealers.

How do broker-dealers need to prepare?

To avoid redundant due diligence efforts, working with fewer product providers is one way BDs felt they could prepare for emerging industry opportunities. As the Moss Adams 2006 Financial Performance Study of Advisory Firms indicated, advisor firms can increase profitability by leveraging their broker-dealers. By helping advisors offload time-consuming administrative burdens, BDs are well positioned for future growth.

In related sessions, when asked what they value most from platform providers, 24 percent of attendees indicated that service and support were chief among their needs, while 14 percent said investment implementation and packaging were most important. Lastly, 24 percent would consult outside assistance for organizational improvements and efficiencies.

"This meeting was pivotal for me -- a lot of good sharing came out of it about where the industry is going," said Mary Ahearn, SVP Retirement Services, CUSO Financial Services. L.P. "There are tremendous opportunities for growth for BDs, so in a climate that continues to grow more and more complex, it's critical to have a partner like SEI to provide innovation and scalable process."

SEI announced a dedicated effort to increase its relationships with the broker-dealer community in early 2006. As a result, the company formed its National Accounts Team to service broker-dealers, as well as creating a broker-dealer hotline for business support, inquiries and troubleshooting needs.

"As the business of financial advice continues to grow more complex and competitive, broker-dealers will be increasingly important to advisors," said Chris Arizin, Managing Director, SEI National Accounts Team. "SEI is focused on creating that link and guiding our clients as trends and opportunities emerge."

Other recent conferences hosted by SEI include the Advisor Growth Forum, which brought together advisors from growth-oriented firms with more than $200 million in assets under management, and the Administrative Professionals Forum, which was attended by key administrative personnel looking to increase operational efficiencies at their firms. The company will host a variety of future sessions including another forum for BDs and educational conferences for different areas of the advisor business.

About the SEI Advisor Network

SEI Advisor Network provides independent advisors with outsourced wealth management platforms that are designed to meet the demands of a new generation of wealthy clients. In an evolving wealth management industry, the group offers an end-to-end process for successfully transforming their clients' businesses in every critical area, including marketing, practice management, investment strategy and client relationship platforms. The SEI Advisor Network is a strategic business unit of SEI. For more information, visit http://www.seic.com/advisors .

About SEI

SEI (Nasdaq: SEIC) is a leading global provider of outsourced asset management, investment processing and investment operations solutions. The company's innovative solutions help corporations, financial institutions, financial advisors, and affluent families create and manage wealth. As of June 30, 2007, through its subsidiaries and partnerships in which the company has a significant interest, SEI administers $407 billion in mutual fund and pooled assets and manages $199 billion in assets. SEI serves clients, conducts or is registered to conduct business and/or operations, from more than 20 offices in over a dozen countries. For more information, visit http://www.seic.com .

SOURCE SEI Investments Co.