Top advisors are thinking twice before moving on to another big firm. According to Dow Jones News Service, steep declines in the market have forced major brokerages to slim down recruiting deals and some have even changed their method of calculating a broker’s production.
Back in December 2008, Colorado-based recruiting firm RJ & Makay reported advisor uncertainty at major firms made for a fourth-quarter “perfect storm.” The firm said advisors were increasingly losing esteem for company names and as the bigger firms pulled back on their transition deals, the thought of moving on was gaining more appeal. Plus, as CEO Darin Manis explains, company buy-outs, diminishing retirement assets and plummeting revenues were taking a toll on advisor retention.
But recruiting has reached a major slowdown, writes Brett Philbin for Dow Jones. “Recruiters say companies are cutting deals because of diminished annual production levels due to market declines. In addition, firms are mindful of increasing scrutiny over high compensation payouts. A lot of high producers are also unavailable after receiving retention packages from Bank of America Corp. (BAC), which bought Merrill Lynch, and from the pending tie-up of Morgan Stanley (MS) and Citigroup Inc.’s (C) Smith Barney unit. Other brokers would rather set up their own shops and go the independent route.”