LPL's recruiting still slow, pickup seen months away

LPL Financial LLC finds its recruiting in the second quarter is sputtering along, much as it did in the first three months of this year. The independent-broker-dealer behemoth has an annual goal of recruiting 400 to 500 new registered representatives and financial advisers. But in the first quarter, the company fell far short of that goal, recruiting just 25 net new advisers. That compares with 182 net new advisers in the fourth quarter last year. Recruiting has been a struggle for many broker-dealers so far this year, and the independent-broker-dealer industry typically regards LPL as a bellwether for recruiting.

NO UPTICK IN NEAR FUTURE

LPL's dismal recruiting performance isn't about to change, according to chief executive Mark Casady, though he did offer a silver lining last week in comments at William Blair & Co. LLC's annual growth stock conference in Chicago. Mr. Casady said that he anticipates recruiting to be much on the same level in the second quarter as in the first. The firm, however, has the potential of returning to more-historic recruiting levels at the end of this year or the beginning of next year, he said. LPL is “not as robust in recruiting, but we continue to see the pipeline building, and recruiting will get back to normal,” Mr. Casady said. The firm is also seeing “higher retention levels” for its existing sales force of 13,377 reps and advisers, and despite the fall off from norms, it “was still at No. 1 for net recruits” in the first quarter, when compared with its competitors, he said. The broad markets have hit all-time highs in the first half this year. That means that the business environment “has been busy for advisers in the past five or six months” and is slowing down the egress of reps and advisers to new firms, Mr. Casady said.