Employee advisers now outnumber firm owners at independent advisory firms — but warning signs persist The following is an excerpt from the Executive Summary of the 2015 InvestmentNews Compensation & Staffing Study, which will publish next Monday.

Advisory firms that outline clear objectives with measurable gains regarding staff performance and productivity tend to grow faster. Read more

Consider your neighborhood. Some houses are rented, some houses and lots will be bought by builders and a few condos will go up. Some houses have fallen into disrepair. What you hope for, though, is that the majority of houses in your neighborhood will be occupied by the owners. Homeowners are the ones who make sure that the schools are good and the streets are clean. Owners will plant trees and throw a good block party. Builders may provide liquidity to the market, but they can’t maintain the spirit of the neighborhood. Read more

While outright acquisitions and deals get all the media attention, mergers are quietly transforming the industry. At the time you read this, thousands of advisors are negotiating the combination of their practices with others in order to create scale, leverage each other’s skills, gain resources, and tackle succession. Perhaps the fastest and best way to grow into a bigger firm is by merging with another business.

There are approximately 250 advisory firms with more than $1 billion in assets under management (AUM) in the financial advisory industry. No more than 30 of those have more than $5 billion in AUM. If you were to ask any such “super ensemble” (a billion-dollar AUM firm) what its vision is, the likely answer is that it wants to “grow to the next step.” For those at $1 billion, that means reaching $5 billion. For those at $5 billion, it means reaching $15 billion and beyond. There is no question that the largest firms are aggressive in their ambitions. The …

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