Lion Street 2020 Annual Report - Report - Page 6
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WE ALTH MANAGEMENT
John Burmeister
President and Chief Executive Officer, Lion Street Financial
When crisis and uncertainty hit in 2020, the value of
having insurance and wealth practices on one platform
was demonstrated. By housing different business units
under one roof, our Firms were best able to preserve,
coordinate and capitalize on emerging opportunities.
2020 also showcased the value of Lion Street having a
growing wealth business based on asset-accumulating
strategies, recurring revenue, new Firm additions and
changing preferences in products like VUL and annuities.
This helped Lion Street Financial achieve unprecedented
results, which include the following:
•
Gross revenue was at record levels as all asset
classes grew. Of note, even during the market decline
and volatility of the first two quarters, assets under
management grew as our Firms acquired even more
assets. Self-management platforms for investors
don’t perform well in a black swan event.
•
Wealth profitability also set a record, contributing
enhanced value to Lion Street.
•
Large, multimillion-dollar wealth Firms joined
in 2020, using the crisis to reposition and take
advantage of our new offerings and opportunities in
2021. This includes some top industry Firms in the
Corporate Benefits space.
•
Average GDC per Firm with at least 12 months
with Lion Street Financial was $750,000,
remarkably high in the industry.
•The number of Broker-Dealer producing
representatives surpassed 200.
•Thanks to the collective vote of our financial
professionals, Lion Street Financial was named
Broker-Dealer of the Year by Investment Advisor
Magazine in 2020, which is the third time in the last
five years. This recognition proves that even in the
difficult and imperfect regulatory world of securities,
having strong relationships and people serving
people is the best model for financial professionals.
•Lion Street Financial (LSF) and Lion Street Advisors
(LSA) combined have amassed an estimated $15
billion of total assets.
Compliance
Lion Street Financial successfully launched the new
regulation SEC Best Interest in June 2020. The SEC first
adopted the rule in June 2019 with the required adoption
by June 2020. Through our partnership with Pershing,
Lion Street Financial implemented the rule with as little
disruption to our Firms as possible. The rule requires
additional documentation and disclosure to retail
customers. This ensures that all recommendations to a
retail customer, Firms and associated persons must act
in the best interest of the retail customer at the time the
recommendation is made. Firms must do this without
placing their financial or other interests ahead of the
retail customer’s interests.
In 2020, the compliance department worked diligently to
find ways to streamline several compliance requirements.
In 2021, online management of personal securities
transactions, outside business activities and personal
brokerage account reporting will be conducted through a
single access point.
Annuities
As Lion Street’s annuity business continues to grow
across the organization, we determined it was time to
deliver enhancements to our annuity platform. After
a lengthy due diligence process, Advisors Excel was
introduced as Lion Street’s new annuity strategic partner
at the beginning of 2020. The partnership with Advisors
Excel provides our Firms access to a broader product
solution set to help address client needs along with
dedicated resources to assist in design and product
selection.
Annuity sales were down across the industry during Q2
and early Q3; Lion Street’s annuity sales rebounded to
finish the year strong. We were also able to add multiple
meaningful annuity producers, both on the fixed and
variable fronts, whose production will be fully realized as
we look ahead to the coming year.
$16B
$14B
$12B
$10B
$8B
$6B
$4B
$2B
$0
2015
2016
2017
2018
LSF/LSA Total Assets
2019
2020