Even industry recruiters are starting to admit that there's a lull in the war for top adviser talent.
“I don't see that much movement,” said Michael King, a recruiter and president of Michael King Associates Inc. “I would have thought I would see more.”
In the second quarter, only 58 veteran adviser teams switched firms, according to InvestmentNews' Advisers on the Move database. That compares to around 97 teams who moved in the second quarter last year and 101 swaps in the first quarter of this year.
InvestmentNews' database only tracks moves of veteran advisers that are announced by firms or publicly reported, but many industry executives and experts claim that the talent pool of veteran advisers who are looking to move is shrinking, especially as the economy improves.
“There is an overall slowdown, not just for the quarter but if you look at the year in aggregate the pie of advisers changing firms has shrunk,” said Tash Elwyn, president of Raymond James & Associates, Inc. “The market at new highs certainly can lead to higher satisfaction levels by clients, which then leads in turn to higher satisfaction levels by advisers.”
Raymond James' own numbers dropped from the first quarter to around $840 million in recruited assets across both its independent and employee channels, down from nearly $1.4 billion the previous quarter, according to InvestmentNews' database.
Despite that short-term dip, Mr. Elwyn and others said momentum remained strong for the specific group of advisers moving to so-called regional firms.
Another regional firm, Stifel Nicolaus & Co. Inc., for example, picked up advisers who had previously managed some $1.7 billion, according to numbers tracked by InvestmentNews.
But overall, the market looks calmer. Executives at many of the large brokerage firms claim that retention of veteran financial advisers is at its highest since 2008.
“Those four firms can only hire so many people from each other so many times before they stop doing that, and we're at that threshold point now,” Morgan Stanley's chief executive James Gorman said at the firm's annual financials conference in June.
UBS Wealth Management Americas' chief Robert McCann told the Financial Times that attrition of veteran advisers had dropped to as low as 3% last year from around 16% when he joined the firm in 2009.
WHERE THE MOVES OCCURRED
A look at the nationwide distribution of moves during the third quarter
Recruiters said that some wirehouse advisers who were considering leaving may still be sitting tight as most of the retention deals offered during the 2008 and 2009 mergers begin to wear off. Many of those deals were structured as a forgivable loan with a duration of around five to seven years.
Industry consultant Alois Pirker, who is a research director with the consulting firm Aite Group, said that the number of moves may have fallen because wirehouses and aggregator firms in the independent space are more focused on larger teams, which require more intricate deals and take longer to move.
“It's going into a period of more active poaching where the bigger advisers become the ones people go after,” Mr. Pirker said. “There is more set up in that. You don't have the large numbers, you just have more of the bigger teams and longer closing cycles.”
“It's always up and down,” he added.
While the numbers seemed to slow, the size of the deals remained steady or ticked up in some cases, particularly among regional firms.
Recruiters said that Stifel had boosted its offer recently to offer as much as 150% of trailing-12 production upfront, a number that generally only seen at the largest firms, such as Morgan Stanley or Bank of America Merrill Lynch. A spokesman for Stifel was not available for comment.
“[Regional broker-dealers] want to carve out their space with the big guys,” said Michael Terrana, president of a recruiting firm, Terrana Group. “And the way to do that is obviously to acquire the [financial advisers] and along with them, the assets.”
Ameriprise, which similar to Raymond James has both an employee and independent channel, made headlines earlier this year after reportedly increasing their top offer to 150% for employee advisers. The firm offers a total of 340% of annual revenue to some top advisers in the first or second quintile according to assets and length of service, according to several industry recruiters.
Ameriprise announced earlier this week it had hired a former Morgan Stanley adviser with $130 million in assets. In May, the firm picked up another ex-Morgan Stanley adviser who previously managed $147 million in assets, according to firm spokesman, Chris Reese.
The tightening of the recruiting pool may be “another reason why deal size may be going up,” said Andrew Parish, who tracks adviser moves through his website, AdvisorHub Inc.
Recruiters remained hopeful that the decline was only a temporary lull. As more of the retention deals were forgiven, recruiting would pick up in the fall or next year, they said.
“You'll see a pickup of moves in the fall,” said Mark Elzweig, a recruiter with Mark Elzweig Co. Ltd. “One thing about these markets is that it boosts people's numbers, so the awards are that much greater."
More from Dynasty Financial Partners president and chief executive Shirl Penney on what's inspiring breakaway brokers to move now.