LPL headquarters in San Diego.

LPL Financial (LPLA) dramatically increased its recruiting results in the second quarter, attracting 128 affiliated advisors vs. 59 in the first quarter of 2016.

The greatest number of recruited advisors, 48, join LPL with individual or team practices that have $100 million or more of client assets. Forty advisors have made the move with $50 million to $99 million of client assets, while the remaining 40 reps have from $30 million to $49 million.  

“We experienced another strong quarter for recruiting,” said Bill Morrissey, head of business development for the independent broker-dealer, in a statement.

A sizeable number of the recruited advisors, 15, moved to LPL from Cetera Financial Group, while nine joined LPL from IBDs in the Advisor Group. Cetera recently became an independent entity, while the Advisor Group is being sold by AIG and bought by Lightyear Capital.

“It seems like LPL has been capitalizing on the upheaval at Cetera and the ex-AIG broker-dealers, for instance,” said recruiter Jon Henschen, in an interview with ThinkAdvisor.

Cetera sees the situation somewhat differently. “Our advisor retention rates have been exceptionally strong this year, and we are grateful to our advisors and institutions, who have overwhelmingly chosen to remain with us, even throughout our company’s strategic transformation process from earlier this year,” the company said in a statement.

“With that process completed, we are now experiencing a robust wave of interest from qualified potential recruits in joining our network of leading broker-dealer firms. For the minority of advisors who have decided to transition onward, we wish them the best in their future endeavors.”

Another factor driving recruiting in the second quarter may be that LPL has made some changes “to its recruiting scale to encourage reps to affiliate with its corporate RIA rather than with its hybrid [office of supervisory jusrisdiction],” Henschen explains. The latter entails clearing exclusively via LPL rather vs. clearing at a variety of firms.”

A sizeable number of recruited reps moved to LPL from Wells Fargo Advisors (WFC), nine, and JPMorgan (JPM), eight. Other reps were formerly affiliated with a wide variety of firms, including MetLife and Fifth Third.

“The general fear of new regulation and the whole DOL fiduciary [issue] can spur reps to think that bigger is better, which may or may not be true when it comes to broker-dealers,” Henschen said. “This leads to a flight to safety and that ultimately hurts the little guys.”

LPL executives seem to agree.

“Given the regulatory environment, including the final rule from the U.S. Department of Labor in April, and the increasing complexity in the financial advice industry, advisors are looking for a firm with the scale and stability to be a long-term partner and one that can support a number of transitions, including a shift to an advisory business model,” Morrissey said. “LPL provides the technology, infrastructure and investment consulting that can help advisors to navigate these changes, and advisors are recognizing that value and choosing to align with our independent platform.”