Krawcheck Says Pace of Broker Departures Has Slowed

Sallie Krawcheck, head of the global wealth and investment management division at Bank of America (BofA), said reports of brokers leaving in droves are greatly exaggerated, Reuters reported.
While there was some attrition earlier in 2009, Krawcheck said the pace of departures among top-producing financial advisers sank to a “record low” during the fourth quarter. Attrition among the top 40% of brokers, ranked by profits, was half the rate of the best previous year ever, she said.

“Quite frankly, we haven’t seen as much as we would have expected,” she said on a conference call today, according to the news report.

Some reports have cited a trend of financial advisers leaving wirehouse firms to join smaller firms and registered investment advisory (RIA) firms. However, while the pace of advisers going independent might have increased, industry research has found that the largest number of advisers leaving wirehouse firms go to other wirehouse firms (see “Wirehouse Movement Slows in October”).

“Despite what I read about these big attrition rates, it’s not happening,” Krawcheck said. “They’re not going to the RIAs (registered investment advisers) in droves.”