By Elizabeth Dilts
NEW YORK, June 30 (Reuters) - After years of jumping from one firm to another, U.S. securities brokers are changing jobs less frequently and the largest brokerage firms say they are seeing their lowest attrition rates in years as financial markets strengthen.
Attrition rates are sharply lower at the nation's four largest firms, known as wirehouses: Morgan Stanley, Bank of America Corp's Merrill Lynch unit, Wells Fargo Advisors and UBS AG's U.S. Wealth Management Americas, according to head counts recorded in the firms' earnings reports and an analysis by Reuters.
The wirehouses lost almost 1,500 financial advisers total in 2012 and again in 2013, according to Aite Group, a research firm. Morgan Stanley and Merrill Lynch each lost approximately 5 percent of their net adviser force in 2012, the group reported.
That has slowed considerably in 2014. Morgan Stanley, the nation's largest brokerage firm by selling force, lost just 30 financial advisers overall, or 0.2 percent, in the first quarter 2014 from the fourth quarter 2013. Morgan Stanley's attrition rate leveled out sooner than its competitors because the firm added a net 104 advisers in 2013.
Merrill Lynch had an attrition rate of just 0.3 percent in the first quarter 2014 from the fourth quarter 2013, and UBS did as well, the firms reported. Wells Fargo declined to comment for this article. Merrill has told Reuters it is now selectively recruiting new brokers.
"Attrition is down across the industry," Greg Fleming, president of Morgan Stanley Wealth Management, told reporters and editors at Reuters' recent Global Wealth Management Summit.
Many brokers who left staff jobs at wirehouses in the five years since 2009 went to smaller broker dealers or registered investment advisor firms that gave the advisers more autonomy to own their own businesses or choose investments for their clients.
But executives at those acquiring firms concede that the trend has slowed, attributing that in part to the brokers getting older and now wanting to make a big career shift when they are nearing retirement.
"It's the age," Joe Duran, chief executive officer and founding partner of United Capital, a national registered investment advisor firm, told Reuters reporters and editors attending the Reuters Global Wealth Management Summit earlier this month.
Nearly half of financial advisers are over the age of 55, according to research firm Cerulli Associates.
Anecdotally, recruiters say that the slowdown in broker moves is creating a sellers' market in which firms are selectively raising the amount of signing bonuses and benefits they will give to a top adviser who jumps over.
"If an adviser wants to leave right now, he can write his own ticket," said Mindy Diamond, president of recruiting agency Diamond Consultants. "Competition forces competition... and incentive packages are at a new high watermark." (Reporting by Elizabeth Dilts; Editing by Lisa Shumaker)
- Financials Industry
- Morgan Stanley
- Merrill Lynch
- brokerage firms
- Wells Fargo Advisors