After working as a financial adviser with Merrill Lynch & Co. Inc. for a number of years, Christopher Ogden had become accustomed to offering clients banking products along with financial planning services. So three years ago when he became an independent adviser based in Atlanta, he grew frustrated that there was no way for him to provide the same banking services to his new client base.
“One thing that attracted me to Merrill was that you could offer any prospective client any financial service,” said Mr. Ogden, who is with Financial West Group of Westlake Village, Calif. “But as an independent adviser I felt limited.”
Then at a conference around a month ago he found out about an adviser program run by EverBank in Jacksonville, Fla., and he completed on-the-spot training that would allow him to sell the bank’s products. In an interview last week, Mr. Ogden said that in the next few weeks he plans to get the word out to his clients about the banking services, and that he expects many of them to take advantage of the new loans and deposit accounts.
Primarily an Internet outfit, though it has four branches in Florida, the $1.6 billion-asset EverBank launched its advisory program in April 2003 and has since signed on 1,200 independent financial advisers from 55 small firms.
Robert C. Foregger, EverBank’s chief operating officer, said its executives decided to start this service because they saw how independent financial advisers were losing business to firms such as Merrill, which owns its own bank, and to other advisers who were setting up shop in banks. Mr. Foregger also viewed this as an untapped market, since no other banks were contracting with financial advisers on a national scale.
“Financial convergence is going on and everyone is moving into everyone else’s business,” he said. “So it’s mandatory for these advisers to have a banking platform so they can compete.”
Financial advisory firms that partner with EverBank sign an agreement to promote the bank’s products, and the individual advisers then complete online and over-the-phone training. To start offering the products, the advisers can download the software and all of EverBank’s forms to their computers. They are paid a commission based on a small percentage of any loan or deposit they bring to EverBank.
Mr. Foregger would not disclose how many customers EverBank (whose parent company recently changed its name to EverBank Financial Corp. from Alliance Capital Partners) has gained through the advisory program. But he said the response has exceeded his expectations and that he expects customer sign-ups to keep growing at a rate of 10% to 20% a month.
He also said that as of May 20 the average balance for accounts from the adviser program was $30,616, and the average mortgage loan, including refinancing, was $175,000.
And EverBank has plenty of room for growth. Mr. Foregger said that about 350 advisory firms operate through the United States, and EverBank is affiliated with only 55 of them. And though these 55 include 12,000 advisers, just 10% of them are qualified to offer banking and mortgage services.
The competition from banks that offer advisory services, either through affiliates or third parties, is what prompted National Financial Partners of Austin to team up with the EverBank. Melanie Wilson, the Texas firm’s director of alternative investments, said it wanted its advisers to provide banking products to keep their clients away from banks, and that EverBank was the only company to offer a full range of services.
“If our advisers can offer this, then customers will not be walking into Chase Bank and encountering their advisers,” Ms. Wilson said.
Mike Engler, a Baltimore-based financial adviser with Cambridge Investment Research of Fairfield, Iowa, said that he decided to start offering the service, a year ago, because he wanted to provide his clients with a full array of products and found EverBank’s program easy to use. So far only about a dozen of his 450 clients have applied for mortgage or refinancing loans with EverBank, but Mr. Engler considers this a success given that his promotion of the products does not go beyond intermittent e-mails to existing clients.
“It’s not a huge portion of my business, but it is a value add-on, especially since a lot of clients are looking for one-stop shopping,” he said.
