This year, brokerages have filed nearly 1,100 bonus cases through Dec. 12, according to FINRA. There were 415 cases filed in 2008.
The increase doesn't necessarily signal that more brokers are leaving firms, but that a higher percentage who do leave are tethered by promissory notes they signed when accepting a signing or retention bonus, said Andy Tasnady, a financial services industry compensation analyst in Port Washington, N.Y.
Brokerages that undergo mergers, in particular, are offering more retention bonuses with terms requiring the broker to stay for as long as seven years, instead of three, once the standard, Tasnady said.
There is a common misconception among advisors that brokerages will negotiate the balance, and that is contributing to the increase in the number of cases, said Thomas Lewis, a securities lawyer for Start & Stark in Lawrenceville, N.J. "There's a notion among brokers that firms will take fifty-cents on the dollar," he said. "Firms want a hundred percent," he said.
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