LPL Financial has suffered a recruiting slowdown in the first quarter and puts part of the blame on an unusual factor — this winter's rough weather.
In an investor presentation posted on the company's website Thursday, LPL said that its “adviser pipeline for 2014 remains healthy but [first-quarter] momentum slowed in part due to disruptive weather.”
Net new financial adviser growth has also been influenced by the departure of a bank with 40 registered representatives and advisers, according to the presentation, which was made at the Bernstein Financials Summit Conference in Boston.
Along with bad weather, broad stock market volatility also had a negative impact on LPL's recruiting in the first quarter, spokeswoman Betsy Weinberger said.
The common wisdom in the securities industry is that volatile markets will slow down advisers who are changing firms as they are more focused on taking care of clients and nervous about the markets during such times.
LPL is a recruiting powerhouse. It is closely watched by the rest of the independent broker-dealer industry and is considered a bellwether for the business.
The company's annual goal is to add between 400 and 500 net new advisers. It is the largest independent broker-dealer with 13,673 affiliated registered reps and advisers.
Full first quarter numbers aren't available yet.
After a slow start last year, recruiting at LPL and across the industry picked up. The firm added just 25 net new advisers in the first quarter of last year but 110 net new advisers in the fourth quarter.
Citing bad weather as a reason for a recruiting slowdown strikes some in the industry as odd.
“I haven't heard of this excuse before,” said Jon Henschen, a third-party recruiter.
“I don't know of any home office visits disrupted” at other broker-dealers, he said.
The bad weather “hasn't slowed our growth,” said John Rooney, managing principal with Commonwealth Financial Network. “It's been a much better first quarter this year [for recruiting] than last, but we don't have the final numbers yet.”
Like LPL, Commonwealth has dual headquarters in the Boston area and in San Diego.
“A visit or two to Boston was disrupted because of the weather, but all visits in San Diego went off without a hitch,” Mr. Rooney said.
Commonwealth Financial has 1,445 producing reps and advisers.