Even though recruiting slowed down in the first half of this year to hit the lowest levels since the credit crisis, some broker-dealers and registered investment advisors are having success in hiring and recruiting from rivals. For example, LPL Financial recruited 47 financial advisors over the first half of the year from Securities America Inc.
To put that in context, LPL recruited nearly as many financial advisors from Securities America in 2023 as it did over the entire 12 months of 2022, when 52 advisors left Securities America to register with LPL Financial, according to the InvestmentNews Advisors on the Move data.
LPL has always been known as an aggressive recruiter, and recently it's been offering the lure of recruiting bonuses or compensation to advisors based on the assets and advisor controls, rather than just as a percentage of his or her annual revenue. This has boosted the recruiting bonus, also known as a transition pay package, to financial advisors who are willing to take LPL's deal over a traditional amount.
Securities America is part of the Osaic network of broker-dealers, formerly Advisor Group, which this summer started to consolidate its eight broker-dealers under one roof.
LPL, Osaic and Cetera Financial Group, each a giant network of financial advisors, are all competing fiercely on recruiting advisors right now, one recruiter noted.
"They're fighting amongst themselves, so they are creating transition pay packages that are aggressive," said Jeremy Belfiore, CEO of Trusted Visions Placement & Consulting.
For example, he pointed to JFC Financial Services in Lincoln, Nebraska, which left Securities America in 2020 to work with LPL. It was a giant branch office with about 100 financial advisors and now has around 350, he said.
"Since JFC Financial joined LPL, they have been crushing it with recruiting," Belfiore said. "They have top-tier payouts and pricing. JFC is a pretty well-oiled machine. For advisors, it's like working with a mini-broker-dealers inside a large broker-dealer."
An Osaic spokesperson declined to comment.
"Independent advisors are changing firms at a more rapid clip than in recent years, which is in part driven by market disruptions," Rich Steinmeier, managing director and divisional president for business development at LPL, wrote in an email. "LPL has a strong offering and is well positioned to offer solutions for those seeking a partner for their businesses."
Earlier this week, InvestmentNews reported that a total of 6,757 advisors moved between advisory and brokerage firms over the first two quarters; down 16.6% from the total in the comparable period last year and the lowest level of first-half activity observed in the data, which go back to 2009.
According to government data, the size of the advisory profession has nearly doubled since then. The data on advisor moves exclude moves resulting from mergers and acquisitions, as well as those between related firms.
The move to charge data aggregators fees totaling hundreds of millions of dollars threatens to upend business models across the industry.
The latest snapshot report reveals large firms overwhelmingly account for branches and registrants as trend of net exits from FINRA continues.
Siding with the primary contact in a marriage might make sense at first, but having both parties' interests at heart could open a better way forward.
With more than $13 billion in assets, American Portfolios Advisors closed last October.
Robert D. Kendall brings decades of experience, including roles at DWS Americas and a former investment unit within Morgan Stanley, as he steps into a global leadership position.
Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.
Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.
