After fast start, wirehouse recruiting hits a wall

The pace of adviser movement into and out of wirehouses picked up at the beginning of this year, compared with a slow 2012, recruiters report. But advisers now appear to be in lock-down mode in the lead-up to tax-filing season. “There's a lull in the recruiting market now because we're within a month of the tax-filing deadline,” said Frank LaRosa, chief executive of Elite Recruiting and Consulting. With investors needing documentation from their brokerage firms to file their tax returns, an adviser's moving prior to the filing deadline could cause some headaches for clients. “[Brokers] don't want to give [clients] another reason not to follow them to a new firm,” Mr. LaRosa said.

NOT TILL AFTER APRIL 15

Danny Sarch, president of Leitner Sarch Consultants Ltd., agrees that the looming tax deadline is likely keeping on the sidelines any advisers contemplating a move. “Anytime an adviser moves, they're putting their clients through a lot, and it's awkward for them to make the move when clients have a lot of stuff going on.” Mr. LaRosa is hopeful that the pace of movement in the industry will pick up after April 15. “A lot of big teams have their fingers on the trigger,” he said. “I think we'll see a lot of movement in May.” The week of Memorial Day is traditionally an active one for advisers making moves to new firms. Another catalyst this year could be the recruiting bonus disclosure rule proposed by the Financial Industry Regulatory Authority Inc. If the rule is passed, it probably will be implemented next year. That might convince some advisers considering a move to act sooner rather than later. “I still question whether [the bonus disclosure] will affect recruiting deals, but some advisers may want to move before it hits,” Mr. Sarch said.