Updated March 29, 2010.
(Dow Jones) People like to keep their options open. Brokers are no exception.
Firms with multiple brokerage channels are seeing notable success in both recruiting and retaining U.S. advisors, analysts say. Wells Fargo & Co., LPL Financial, Raymond James Financial Inc. and Ameriprise Financial Inc. each offer options such as a traditional brokerage and an independent platform.
"These firms can use it to their advantage when recruiting, and that could be why they are seeing so much success," said Bing Waldert, brokerage analyst with Cerulli Associates.
Wells Fargo Advisors offers a traditional employee channel, bank brokerage, independent group called Wells Fargo Financial Network, or FiNet, and quasi-independent channel, called Profit Formula, in which brokers pay a pro-rata share of expenses in return for a higher payout, but are still employees of the company and receive benefits.
Overall, Wells Fargo Advisors hired about 1,300 experienced advisors and 400 rookies in 2009. This year, it plans to bring in another 1,000 experienced brokers and 400 novices, with nearly three-fourths coming from wirehouses, according to Chief Executive Danny Ludeman.
John Peluso, president of FiNet, says offering multiple channels "is hugely beneficial to the overall attractiveness of Wells Fargo Advisors, because it all goes back to [having] choices." FiNet has grown its head count to about 825 advisors, which is up 120 since September.
Scott Calvert, an Atlanta-based advisor, left UBS AG (UBS) to go independent with FiNet about a year ago. He says he was nervous about running his own shop, but chose FiNet because he felt more comfortable with the backing of Well Fargo's multiple channels than an exclusively indendent model.
Ameriprise offers both an employee and an independent option. Patrick O'Connell, co-head of Ameriprise Advisor Group, said the employee channel hired 550 advisors in 2009, and he has similar goals for recruiting this year.
He says having options, even if brokers don't take advantage of them, is comforting and sometimes seen as a "safety net" by advisors going independent.