Question-and-Answer Session
Operator
(Operator Instructions) Our first question is from the line of Devin Ryan - Sandler O’Neill.
Devin Ryan - Sandler O’Neill
Can you remind us approximately what percentage of client assets are equity related, and are you seeing actual outflows in client assets just given that the volatile markets or the declines are still primarily related to the equity market declines?
Thomas James
Actually we’re seeing net inflows, because of the recruiting again. I just reviewed last night the number of new accounts moving into the firm versus those being delivered out. We’ve maintained about a 2.25 to 2.50 to 1 ratio. It’s largely from recruiting and the acquisition of accounts by existing financial advisors.
Any decline we have in what we call assets under administration as related to the market decline. In fact this new inflow of money has offset a lot of the market decline, not just in managed assets, but in non-managed assets.
We have been working for years on improving asset allocation throughout our sales force and you’ve seen some of that reflected in our client base, and apart from those that I described that had moved out of the market from managed assets or from unmanaged fee-based programs, which is small relative to the total group, it’s still larger than you would normally see.
I think during the year we still were more like 14 or 15% erosion out of managed accounts in terms of cancels – 10 to 14%, which is a low average, relatively speaking, especially in a down market.
The opportunity here is that the base has grown, it’s just that, unfortunately, the assets have depreciated in value. I can’t give you off the top of my head. I don’t know if anybody here knows.
Unidentified Executive
There’s a lot of packaged products in there that’s hard to...
Thomas James
We’d see just a mutual fund number. We don’t know how much of that would be in PEMCO and other fixed income alternatives that Templeton-type assets.
Unidentified Executive
We believe it’s heavily weighted towards equity versus fixed income alternatives and other types of asset classes. For our own benchmarking, we tend to estimate somewhere in the two-thirds to three-quarter equity totals for large groups of clients, but because of the packaged products, it’s hard to be precise.
Devin Ryan - Sandler O’Neill
That’s actually helpful. And just given the more recently recruited FAs and it sounds like that they’re typically larger on average than maybe the existing FAs; how long does it take for them to actually become accretive to results on average?
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