Tax season keeping wirehouse reps in their seats

Recruitment hits lull ahead of clients' filing; 'lot of movement in May'

Mar 27, 2013 @ 4:04 pm

By Andrew Osterland

The pace of adviser movement into and out of the wirehouses picked up at the beginning of this year compared to a slow 2012, say recruiters. But advisers now appear to be in lock-down mode in the lead up to the tax filing season.

“There's a lull in the recruiting market now because we're within a month of the tax filing deadline,” said Frank LaRosa, chief executive of Elite Recruiting and Consulting.

With investors needing documentation from their brokerage firms to file their tax returns, an adviser moving prior to the filing deadline could cause some headaches for clients. “Brokers don't want to move now for fear of creating problems for their clients. They don't want to give them another reason not to follow them to a new firm,” said Mr. LaRosa.

Danny Sarch, President of Leitner Sarch Consultants, agrees that the looming tax deadline is likely keeping advisers contemplating a move on the sidelines for now. “Anytime an adviser moves they're putting their clients through a lot, and it's awkward for them to make the move when clients have a lot of stuff going on.”

Mr. LaRosa is hopeful that the pace of movement in the industry is poised to pick up after April 15. “A lot of big teams have their fingers on the trigger,” said Mr. LaRosa. “I think we'll see a lot of movement in May.”

The Memorial Day weekend is traditionally an active week for advisers making moves to new firms. Another catalyst this year could be the recruiting bonus disclosure rule proposed by the Financial Regulatory Authority. If the rule is passed it would probably be implemented next year. That might convince some want-away advisers to move sooner rather than later.

“Some people are expecting a flurry of movement if the bonus disclosure goes through,” said Mr. Sarch. “I still question whether it will affect recruiting deals, but some advisers may want to move before it hits.”


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