Wirehouse Movement Slows in October

Brokers are switching firms at a slower pace, and the largest number still go to another wirehouse firm rather than a new advisory channel, according to the Discovery Database.

In October, 1,448 advisers moved firms, and 361 (25%) of them were in the wirehouse channel, down from 380 in September, according to the research firm, which tracks financial adviser movement month to month.

As data has previously shown, despite the hype that many wirehouse advisers are going independent, the largest number still go to another wirehouse when switching firms (see “Once a Wirehouse Adviser, Always a Wirehouse Adviser?”). Of the 25,109 reps that changed firms from October 2008 to September 2009, 40% were wirehouse reps, and more than half (53%) of wirehouse reps stayed within the wirehouse channel, according to Discovery.

Of the wirehouse reps who switched firms in October, 34% chose to go to another wirehouse— more than other channel. Other options brokers chose were: changing to an institutional focus (20%), going independent (18%), joining a bank (14%), and going to a regional firm (11%), according to the data.

Looking Back

The year started out with a lot of movement in the advisory sphere. On average, 2,140 advisers in all channels moved per month over the last year (from October 2008 to September 2009), according to Discovery. In the first quarter of 2009, there was a 17.6% increase in adviser movement from the last quarter of 2008.

However, there was a 24% decrease in adviser movement from the first quarter to the second quarter of 2009, and adviser movement remained about the same from the second to third quarter of 2009, according to the research firm.