The dream B-D destination of breakaway advisers

Two indie-B-Ds top wish list for potential breakaways

Oct 7, 2012 @ 12:01 am

By Andrew Osterland

Independent broker-dealer LPL Financial LLC and regional brokerage Raymond James Financial Inc. top the list of most-desired destinations for potential breakaway financial advisers.

A report released last week by Cogent Research LLC found that 22% of 1,700 advisers surveyed across distribution channels are “open to the idea” of moving to a new firm.

That percentage is consistent with previous years, said Meredith Lloyd Rice, a senior project director at Cogent. This year, significantly more advisers at national wirehouses (29%) said they are considering leaving their firms than did so last year (25%).

“We think the national wirehouse channel is going to contract from about 30% of advisers currently to 26% over the next several years,” Ms. Rice said. “We predict the biggest growth will be in the [registered investment adviser] 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, the survey found.

Of the 380 advisers who said they are likely to move, 73% intend to stay in the same channel. However, just 50% of the wirehouse advisers considering a move said they plan 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, she said.

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 B-D as a potential destination. Anything above five was considered “high.”

Forty-three percent of advisers surveyed gave LPL high ratings, while 40% did so for Raymond James.

Rounding out the top five most favored destinations were Wells Fargo Advisors LLC, Ameriprise Financial Inc. and Morgan Stanley Wealth Management.

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“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.”

aosterland@investmentnews.com Twitter: @aoreport

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