Welcome to Financial Advisor IQ

Recruiting in Broker-Dealer Space Heats Up

August 3, 2017

Broker-dealers are seeing more recruiting after a lull some execs say was due to uncertainly surrounding the Department of Labor’s fiduciary rule, Financial Advisor magazine writes.

Apparently more smaller broker-dealers and individual advisors are now reaching out to larger firms with the hopes of joining them, according to the publication. And even independent RIAs are considering moving to a corporate RIA at a broker-dealer, execs tell Financial Advisor magazine. Meanwhile, just as many advisors at independent broker-dealers are considering going the RIA route as there are wirehouse reps mulling going indie, Scott Collins, director of brokerage independence at TD Ameritrade, tells the publication.

Executives at independent broker-dealers tell the publication that some advisors initially considering a move decided to wait once President Donald Trump directed the DOL to review the rule in February. The rule, which purports to require retirement account advisors to put clients’ interests ahead of their own, was delayed by 60 days but went into partial effect June 9. With the rule in place – at least for now – the advisors who decided to hold back are “now back in the fray,” Jamie Price, chief executive of the Advisor Group of broker-dealers, tells Financial Advisor magazine.

And the DOL’s rule has accelerated other industry trends, Bill Morrissey, managing director of business development at LPL Financial, tells the publication. Many advisors are nearing retirement while fee pressures are also making advisors reconsider their broker-dealer partners, Morrissey says.

Bill Morrissey

Industry consolidation combined with the DOL’s rule has prompted major changes in the advice industry, Jodie Papike, executive vice president of recruiting firm Cross-Search, tells Financial Advisor magazine. And with changes occurring industrywide, advisors are reevaluating their business models, she says. Most advisors considering a move to a broker-dealer, meanwhile, are opting for larger firms, Jon Henschen of recruitment firm Henschen & Associates, tells Financial Advisor magazine.

By Alex Padalka
  • To read the Financial Advisor Magazine article cited in this story, click here.