Recruiting slows to a trickle at LPL; pickup months away

LPL Financial LLC expects recruiting in the second quarter to sputter along, much as it did in the first three months of the year. The independent-broker-dealer behemoth in the recent past has set an annual goal of recruiting 400 to 500 new registered reps and financial advisers. But in the first quarter of 2013, the company fell far short of that goal, recruiting just 25 net new advisers. That compares with 182 net new advisers in the last quarter of 2012. 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. LPL's dismal recruiting performance is not about to change, according to chief executive Mark Casady, although he did offer a silver lining today in comments at William Blair & Co. LLC's annual growth stock conference in Chicago. Mr. Casady said 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 of 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 of the year. That means the business environment “has been busy for advisers in the past five or six months,” and slowing down reps and advisers jumping to new firms, Mr. Casady said.