Wirehouses Plan Retention, Recruitment for 2010

Wells Fargo and Bank of America (BofA)’s Merrill Lynch plan to add more brokers to catch up to Morgan Stanley Smith Barney.
News reports have indicated that the big wirehouse firms are beefing up broker retention and recruitment. A Wells Fargo spokeswoman confirmed to PLANADVISER that the firm plans to recruit more than 1,000 new brokers, a combination of both rivals and new trainees, this year.  The firm currently has just shy of 15,000 brokers.

Wells Fargo Advisors is focusing on “hiring high-quality advisers who fit our culture and are committed to helping clients meet their financial needs,” said Teresa Dougherty, a spokeswoman for Wells Fargo Advisors, in an e-mail. “We’re looking for strong networks and previous experience working in some capacity with an affluent network. Trainees have an average of 16 years of professional experience.” She added the firm will continue to invest a significant amount on hiring and training new financial advisers, including home office/in-person training and monthly classes throughout the year.

Adding 1,000 new brokers could possibly make Wells Fargo Advisors surpass the headcount of the second-largest brokerage firm, BofA Merrill, which has slightly more than 15,000 brokers, and gain ground toward the largest broker, Morgan Stanley Smith Barney, which boasts more than 18,000 brokers.

However, BofA Merrill is doing its own recruitment, according to news reports. The Financial Times first reported that BofA plans to increase Merrill Lynch’s adviser force by 2,000 brokers. The firm is offering some top-tier brokers 120% of their annual production to join from a rival, according to reports. BofA couldn’t be reached for comment.

As BofA tries to expand, the firm’s rival Morgan Stanley Smith Barney is focusing on retaining its lead. The firm expects to maintain a financial adviser headcount in the 17,500 to 18,500 level, and “would recruit/train/hire at a level required to support that,” said Christine Pollak, a spokeswoman for MSSB, in an e-mail.

The increased recruitment efforts come amid speculation that more brokers are contemplating going independent. In fact, most wirehouse brokers do not “break away” to go independent; the largest slice of wirehouse brokers who leave firms jump to another wirehouse, according to the Discovery Database (see “How Many Brokers Really Went Independent in 2009?”). It seems the largest three wirehouse firms are poised to capitalize on that movement.