Wirehouse Switching Slows in Second Half of 2009
The number of wirehouse advisors switching broker/dealers has been in steep decline since June.
In November, just 177 advisors in the wirehouse channel switched firms, the smallest monthly number all year, according to Discovery Database. Of those advisors, 42 percent remained in the wirehouse channel. About 19 percent jumped to institutional firms while the regional and independent b/d channels took in 13 percent each.
In March, wirehouse advisor movement peaked with 1,090 wirehouse reps switching b/ds, though a full 62 percent of them stayed within the channel that month. In June, that number slipped to 1,043, with 38 percent choosing to stay in the channel. Since then, fewer and fewer wirehouse reps have been heading for the exits. Consider that between January and June, 5,900 wirehouse reps switched b/ds, compared with 2,342 that switched between July and November.
“Movement has slowed dramatically over the last six months,” says Rick Peterson, president of Rick Peterson & Associates, a Houston-based industry recruiting firm. “There was a feeding frenzy among firms at the end of last year that continued in the first quarter of 2009.”
Indeed, the feeding frenzy of the first half of the year helped many firms, especially independent and regional b/ds, raise their rep counts and well as average production. Commonwealth announced today it reached its highest level of new advisor revenue recruited in the firm’s 30-year history. Average revenue per new advisor recruited increased 40 percent year-over-year, reaching $350,000 in gross dealer concessions. In total, the firm’s 2009 new advisor revenue exceeded $60 million. RBC Wealth Management, the Midwest regional b/d recruited a record 308 financial consultants from other firms during the 2009 fiscal year.
In the last couple of months, Morgan Stanley Smith Barney and Bank of America both started offering reps recruiting packages above 300 percent. Peterson says it’s likely those advisors who are looking to take advantage of big recruiting deals will wait until the new year to plan their moves. “January is a recruiting feast. The first half of the new year will pick back up again once clients have received their year-end statements and tax issues have been sorted out,” Peterson says.
