What’s your view on the recruiting market in 2010 vs. 2009?

The wirehouse shuffle, as I call it, is now back to normal vs. the third quarter of 2009, when things really dropped off for various reasons.

Changing deals and changing dynamics at the four major firms in the early part of 2009 represented a period of mayhem. It was like the ship was sinking.

Now, it’s more of an even flow. The first part of 2009 was really good, and the second half was not so good.

But in 2010, if all things remain the same, there should be a steady flow of wirehouse brokers changing firms throughout the year.

What makes 2010 different?

Unlike in the past 15 or 17 years, Washington now plays a major role with proposed bank taxes, compensation rules and TARP. There is an overall desire to reign in Wall Street, and that could have an impact on the movement of brokers this year.

On the other hand, the consistency of deals could be a more important factor in influencing things —and advantageous to the wirehouses.

What happened in 2009 — when Bank of America took control of Merrill Lynch, Wells Fargo took control of Wachovia and Morgan Stanley and Morgan Stanley came together —the recruiting deals and packages were changing all the time. This meant that many people didn’t want to move, when they found that their paperwork would be changing from one day to the next.

I’ve been told that this year, deals will be consistent at the majority of the firms. And that should help with recruiting.

Another factor is earnings, and recently positive earnings like those announced by Morgan Stanley, could also impact recruiting. And if earnings are down, or below estimates, like at BofA Merrill, that could influence things. Advisors are very weary of such developments these days.

What’s your view on today’s recruiting packages?

They are pretty good these days, and brokers are really paying attention. The upfront packages are going from about 85 to 145 percent of yearly production. This is decent, and near where we were last year —though the upfront bonus went as high as 160 percent in 2009.

There are a lot of bogies in the back, meaning packages that total 165 percent to 330 percent.

For larger advisors, they always want to listen to those offering 330 percent, and this size deal increases the odds that an advisor will move to a rival firm offering that.

Advisors might go to a regional for different reasons, including a higher payout. Some, for instance, have worked at all the wirehouses and need to go elsewhere for a new deal.

The wirehouse policy is that once you’ve left, you can’t return for seven to 10 years. But it’s always worth trying to go back to a previous firm.

This year, wirehouse advisors can switch firms and make a more educated decision about that move than in 2009, when advisors were really trying to jump out of a burning building it seemed.

A couple weeks ago, an advisor called me and after being at a wirehouse for 23 years, switched to a regional firm but couldn’t go right back to the wirehouse where he was. It’s too bad he couldn’t have taken more time to consider the move before it was made about 18 months ago.

What’s most interesting about today’s recruiting market?

The 330 percent deals are an important development. Merrill Lynch had such packages a few years ago and then stopped offering them. Merrill is now at about 220, UBS has just raised their deal —which starts at 140 percent upfront.

This makes a recruiter excited. Advisors want to start making some money back after losing it in the past few years.

What’s your view on breakaway brokers and wirehouse brokers going independent?

Originally, brokers thought that independence might be the only way to go, and they always look at going independent. Some, though, are not eager to deal with many of the administrative hassles that can go along with this move.

The caveat is that the average production of advisors going independent has catapulted.

Three years ago, as I placed wirehouse brokers to independent firms, the average production (or revenues) would be $300,000 to $500,000 a year. That is pretty good.

Today, this figure is well over $1.5 million. The independent firm may not be getting as many people as headlines could lead you to believe, but they are getting the high-producing advisors.