While those of us who are mired deep in the minutia of the recruiting wars feel that the environment is as hot as ever, the trade press reporters who have called me have been asking why the movement has slowed. What's going on?
First, realize that the press usually likes only to cover movement of above $1 million in production. More folks at that level moved during 2008-2009 than the industry has ever seen. But as the world stabilized, as retention deals got paid, that movement slowed. When you look at the world from only that point of view, yeah, it's slower.
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However, as a direct result of the biggest producers not moving, the industry has become much more aggressive going after the next tier of producer. These folks, say from $400,000 to $750,000, got minimal retention packages and were largely ignored when the movement was at its most fierce and then again when the retention packages hit. How would you feel if you got very little from your own firm, even after twenty plus years of service, and the new guy now sitting next to you, with the same length of service in the industry, got a 200% package? And every firm has attrition from retirement, death, terminations, folks just having enough and leaving the industry, and a whole bunch going to smaller firms.
With data provided by Discovery Database, but compiled by me and my staff, here is a summary of the Wirehouse movement in May 2010. I have no way of figuring the level of production lost or won:
Morgan Stanley Smith Barney: They lost 60 Advisors to the other three Big Firms while recruiting 36. They also lost 137 other Advisors to all sorts of other BDs. So, 197 out and 36 in. Against the other Big Firms, they are net negative 24 Advisors. It does show when you are the biggest, you have the most to lose. It also helps to explain why they are trying to recruit lower producers as well as aggressively hiring more trainees. Their overall headcount appears to be trending down.
Merrill Lynch: They lost 142 Advisors to other firms, with only 36 going to the other big firms. They brought in 31 Advisors from the other Big Firms. Net negative 5 against their peer group. Overall trend is similar to MSSB.
Wells Fargo Advisors (employee channel): I'm looking at their employee channel only, in order to compare apples to apples with the other Big Firms. Of course, they have other channels (Indy, Private Banking, Broker in Branch) and their Indy channel is certainly aggressively hiring. In the employee channel, they lost 11 to the other Wirehouses while bringing in 29, for plus 18 vs. the biggies. They lost 67 to firms outside the Big 3.
UBS: The smallest of the Big Firms lost 35 to the other Wirehouses out of total attrition of 96, while recruiting 46 from the other Big Firms. They are plus 11 vs. the other big firms.
The Headhunter's Summary: As I've written before, Wirehouse to Wirehouse movement, as a percentage of overall movement, is low, under 30%. Big firms have big targets on their backs from the rest of the industry. Challenge: What is your value proposition, other than your deal?
