Recruiting slowed in the first half while M&A soared

Volatile markets may be holding recruiting activity back from its breakneck pre-pandemic pace but mergers and acquisitions have more than rebounded from the 2020 low.

Adviser recruiting activity appears to be slowing down as firms increasingly grow their head count and assets through deal-making, according to an analysis of the most recent industry data.

Total moves of advisers between firms were up only 1% during the first half of the year compared to the same period a year earlier, according to the InvestmentNews Advisers on the Move Database. The data include advisers who transition between firms, excluding those that result from a merger or acquisition.

Q2 Top Net Gains

Q2 Top Net Gains	Advisers Gained	YTD
LPL Financial LLC	728	895
Fidelity Brokerage Services LLC	113	257
Ameriprise Financial Services, LLC	77	102
Cetera Advisor Networks LLC	73	67
GWFS Equities, Inc.	64	100
Morgan Stanley	50	89
Raymond James Financial Services, Inc.	41	89
Raymond James & Associates, Inc.	37	63
Citigroup Global Markets Inc.	25	70
Commonwealth Financial Network	21	39

Still, the lift over the first two quarters came in large part from a June deal that brought CUNA Brokerage Services’ brokerage and advisory assets to LPL Financial, resulting in more than 500 advisers moving their registrations to the independent broker-dealer. LPL did not outright buy the brokerage, which had $36 billion under management.

Q2 Top Net Losses

Q2 Channel Net Changes	Adviser Moves	YTD
Independent Broker-Dealer	840	1,092
RIA	270	614
Discounter	114	300
Institutional	18	-3
Regional Broker-Dealer	-29	50
Insurance Broker-Dealer	-156	-422
Wirehouse	-418	-965
Bank	-639	-666

Even including those transitions, first-half moves of experienced advisers were down 7% from the first half of 2019.

Volatile markets, which can be a difficult time to transition assets, may be holding recruiting activity back from its breakneck pre-pandemic pace. But mergers and acquisitions have more than rebounded from the 2020 low.

M&A in wealth management grew by 39% year over year in the first half, according to the latest quarterly report from Echelon Partners. The bank and wealth management consultancy projects 2022 to be another record-breaking year following the highest volume in any second quarter since it began tracking data.

In other words, if this year has been slow for individual advisers and teams on the move, entire firms are changing hands more than ever.

In the second quarter, 840 advisers on net moved to independent broker-dealers, 270 to registered investment advisers, 114 to discount brokerages and 18 to the institutional channel. Meanwhile, a net 639 advisers moved from banks, 418 from wirehouses, 156 from insurance broker-dealers and 29 from regional broker-dealers.

Q2 Channel Net Changes

Q2 Top Net Losses	Advisers Lost	YTD
CUNA Brokerage Services, Inc.	583	596
Merrill Lynch, Pierce, Fenner & Smith Incorporated	275	584
Wells Fargo Clearing Services, LLC	139	380
Edward Jones	96	188
First Financial Equity Corporation	78	100
UBS Financial Services Inc.	54	90
Equitable Advisors, LLC	47	93
Securities America, Inc.	44	73
NYLIFE Securities LLC	31	78
Northwestern Mutual Investment Services, LLC	29	66