More wirehouse reps looking to leave home

Percent of advisers contemplating breaking away on the rise, survey shows; changing channels

Oct 5, 2012 @ 3:10 pm

By Andrew Osterland

More advisers at national wirehouses are considering leaving their companies, a new surveys shows. And independent broker-dealer LPL Financial LLC and regional brokerage Raymond James top the list of favorite destinations for those potential breakaways.

An independent report released on Thursday by Cogent Research LLC found that 22% of 1700 advisers surveyed across all distribution channels are “open to the idea” of moving to a new firm. That percentage is consistent with previous years, said Meredith Lloyd Rice, senior project director for Cogent. But substantially more advisers at national wirehouses (29%) said they were considering leaving their firms, than did so in last year survey (25%).

“We think the national wirehouse channel is going to contract from about 30% of advisers currently to 26% over the next several years,” said Ms. Rice. “We predict the biggest growth will be in the RIA channel and, to a lesser degree, the independent B-Ds.”

Wirehouse advisers also are far more likely to be looking outside their distribution channels for greener fields than other advisers, the survey found. Of the 380 advisers who said they were likely to move, 73% of them said they intend to stay in the same channel. But only 50% of the wirehouse advisers considering a move said they planned to look for a job with another large Wall Street firm. “There's a lot less in-channel loyalty among the wirehouse advisers,” Ms. Rice said.

The reasons most often cited by wirehouse advisers for wanting to leave were the opportunity to make more money and a desire for greater job satisfaction.

In terms of where advisers would like to land, LPL ranked first among 25 broker-dealers listed as options. Cogent asked advisers to rank on a scale of 0 to 10 the likelihood that they would consider each broker-dealer as a potential destination. “High” consideration included ratings of between 5 and 10. Forty-three percent of the advisers surveyed gave LPL high ratings, while 40% did so for Raymond James.

RELATED ITEM 10 B-Ds that rank highest with potential breakaways »

“A theme we saw in the research was that advisers' considering a move want more independence and they see LPL and Raymond James as offering them more flexibility,” Ms. Rice said. “It suggests [those firms are] on the right track and competitors should take note.”

0
Comments

What do you think?

View comments

Recommended for you

Featured video

INTV

Former CIA director John Brennan on the importance of contingency planning for financial advisers

Speaking from the floor of the MarketCounsel Summit in Miami, the ex-CIA director makes a strong case for why financial advisers need to have a plan for managing through a disaster.

Video Spotlight

Help Clients Be Prepared, Not Surprised

Sponsored by Prudential

Recommended Video

Path to growth

Latest news & opinion

Brace for steepest rate hikes since 2006 in new year

Citigroup, JPMorgan Chase predict average interest rates across advanced economies will climb to at least 1 percent in 2018.

Why private equity wants a piece of the RIA market

Several factors, including consolidation in the independent advice industry and PE's own growing mountain of cash, are fueling the zeal to invest.

Finra bars former UBS rep for private securities transactions

Regulator says Kenneth Tyrrell engaged in undisclosed trades worth $13 million.

Stripped of fat commissions, nontraded REIT sales tank

The "income, diversify and interest rate" pitch was never the main draw for brokers.

Morgan Stanley fires former Congressman Harold Ford for misconduct

Allegations against the wirehouse's former managing director include sexual harassment, which Ford denies.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print