The wave of advisors jumping onboard with independent broker-dealers peaked in 2009. There could be another massive exodus from the wirehouses in the future, but for the moment, the migration has slowed.

Yet there is still pent-up wanderlust, say recruiters. "In an informal survey we took, 72% of the advisors we talked with expressed an interest in joining or changing their broker-dealer," says Howard Diamond, managing director of Diamond Consultants, a major recruiting firm in Chester, N.J. "There has been a dramatic increase in the number of advisors in the independent space and I think you will continue to see that. The numbers that want to at least investigate the options are up tremendously."

But recruiters at broker-dealers acknowledge the movement has slowed down. Partly that's because there are too many uncertainties in the world.

And some of those who are moving are being forced to. Smaller independent broker-dealers have had to close shop in the face of financial pressure. A handful of big players are closing their independent broker-dealer divisions. And of course, the major wirehouses continue to push those representatives who earn less out the door.

Steve Dowden, president of Invest Financial Corporation, a subsidiary of National Planning Holdings and part of its independent broker-dealer network, says that the same number of advisors in play are approaching his firm as there were in 2009-if only to talk. "The interest is high, but advisors are being cautious," he says. "They are doing their due diligence [checking independent broker-dealers out] right now, but they are not satisfied with where they are."

Advisors seeking a change of pace are holding back for several reasons, Dowden says. One is that regulatory reform and fiduciary changes are coming. The other is that the United States is facing an election and an uncertain geopolitical situation in Europe. "People hate the unknown," he says. "There will be more deals in 2013 when these issues are sorted out. Advisors are playing a wait-and-see game now, just like consumers."

Plus, change is not easy. "Today there are more frustrated advisors who want to make a change than there were 10 years ago, but moving is daunting," says Andrew Daniels, managing principal of field development at Commonwealth Financial, one of the B-Ds that has been successful at recruiting. "Transition is hard work, but with an experienced partner in the independent broker-dealer's role, it is totally doable."

Under most circumstances, advisors can keep their own RIA offices open after joining forces with a broker-dealer (or else use the broker-dealer as their RIA). The advisors can also retain their own brand name and offices. How independent they can be depends on the broker-dealer.

The scramble for advisors has become so intense among the independent companies that many of them are offering perks and bonuses to make the leap less painful. There is pressure for them to offer previously unheard of amounts of money to turn heads.

"Since the bottom in 2008, the stock market has nearly doubled, so B-Ds are flush and competition for reps is high," says Eric Schwartz, CEO of Cambridge Investment Research in Fairfield, Iowa, another broker-dealer that has enjoyed successful recruiting efforts. "The old days of offering 2% of trailing-12-months revenue to get a firm to join a broker-dealer are over."

Cambridge is offering, on average, 10%, he says, though the offers range widely around that average. Meanwhile, he's seen other broker-dealers make offers of 30% or higher.

Most B-Ds look for advisor buisnesses of a particular size that will fit with their existing models. Some take firms that operate only on fees, while others admit firms charging both fees and commissions. It is important to recognize that the broker-dealer can offer a lot more than money. It can also make services available to help reps with their business.

"It is a much more complicated process now. It used to be much simpler," Schwartz says, adding that his company has lured advisors away from competitors promising more money by advertising Cambridge's reputation and services. The company not only offers back-office support and technology, but can also help advisors come up with their succession plans and help structure and finance their acquisitions. 

"We'll even answer the phones for them and host their Web site, if they want," he adds.

For such services, advisories pay some of their revenues to the broker-dealer. For Securities America Inc., the fee ranges from 5% to 8% of revenues. For that, the advisor gets business processing, compliance support, a transition team, technology, practice management programs, a comprehensive retirement income distribution platform and other services.

"We have a branch office development team today of 12 and a transition team of five," says Gregg Johnson, senior vice president of branch office development and acquisition for Securities America Inc., which now has $12.5 billion in assets under management and more than 1,600 advisors. "The transition team works with the advisor for 60 days prior to their joining us and 180 days after, to make the transition as smooth as possible." The firm's goal is recruiting growth of 10% to 15% this year.

Once they join, advisors get approval for changes they want to make or for their advertising. They can also take seminars to make sure they comply with SEC regulations. Most advisors joining Securities America use the corporation as their RIA, while a minority retain their own RIA status.

"The movement of RIAs is still there," says Johnson. "More advisors are going to a fee business, and many are realizing they can do their advisory business without being their own RIA. It is more efficient to have us do the compliance and support work so they can spend their time with clients."

The movement is part of what Discovery Data in Eatontown, N.J., calls a seismic shift in the financial services industry. From 2009 through 2011, the independent broker-dealer channel realized a net gain of 4,288 reps, while the wirehouse broker-dealer channel lost 3,621. "That is an enormous three-year shift," said Discovery Data in its BD Rep Movement Study of March 2012.

Last year alone, not even the most active, the independent channel gained 1,173 representatives and the wirehouses and regional broker-dealers lost 1,050.

LPL Financial has been the biggest winner by far. "The aggressive growth strategy at LPL Financial is clearly paying dividends," Discovery wrote, adding that LPL still knows how to grow organically and not just acquire. "LPL realized a net gain of 1,532 reps over the three-year period, more than any three other broker-dealers in the industry combined."

But other B-Ds without LPL's size are also gaining. For instance, Invest Financial Corp., the second-largest of the four National Planning Holdings broker-dealers, added 473 reps in 2011 for a net gain (minus departures) of 199. Its total number of reps is now 1,458.

Bill Morrissey, executive vice president of business development at LPL Financial, says the changing needs of consumers are playing a role in advisors' movements, and his firm is taking full advantage of that. Baby boomers have more complex planning needs as they age and need more than just insurance and other related products, and LPL helps its financial advisors meet those needs, Morrissey says. In this environment, they will no longer want to be employees.

"The independent channel is the channel of choice," he says.

LPL has been successful at drawing financial advisors to its network in part because it has 42 external recruiters and 20 internal ones. The recruiting force is divided so it can handle advisors at different revenue levels, such as those with $125,000 to $1 million, those with $1 million to $5 million, and elite advisors and producer groups generating more than $5 million. The recruiting is one-on-one for smaller firms while bigger firms meet with teams, Morrissey says.

At Raymond James, recruits are offered a broad choice of affiliation and business models: They can work as an employee, as an independent or as an RIA. Raymond James Financial Services, the independent broker-dealer with some 3,000 advisors and more than $150 billion in AUM, draws advisors primarily from wirehouses, but also other regional and independent firms.

Raymond James' Investment Advisors division, with about 100 affiliated firms and $7 billion in assets, also attracts advisors from wirehouses and other independent broker-dealers, but appeals more to those seeking total independence and a fee-only model. Though it has yet to approach the scale of the major custodians, the firm is betting that the independent RIA channel will see brisk growth going forward.

"In every case, the advisor [affiliated with Raymond James] retains control over their business with the freedom to manage client relationships their way, with the complete support of a full-service firm. This support starts from the very beginning of their affiliation and includes onsite support from a member of our transition team," says Bill Van Law, president of the investment advisors division.

The company recently announced its successful recruitment of a four-person team from Morgan Stanley Smith Barney to its independent channel.

As part of its practice management package, Santa Monica, Calif.-based National Planning Corporation, the largest of four independent broker-dealers in the National Planning Holdings network, offers the Wealth One platform, which allows advisors who act as wealth managers to offer strategic and tactical solutions for their clients' assets. The platform allows custom portfolio management, including such features as tax harvesting capabilities, reports and block trading, to the individual advisor so that he will not have to develop and support the technology on his own.

The recruiting team at NPC has grown from two people to four people in the last three years. It looks for independent advisors who produce at least $250,000 in revenues, says John Johnson, who helms NPC's recruiting efforts.

Schwartz at Cambridge predicts ongoing consolidation in the industry. Firms with continued recruiting success are likely to survive this wave of mergers and acquisitions.

"In 1995," he says, "we were one of the many smaller broker-dealers that were typical of that era, but today, the top 10 firms generate 55% of the revenue within the broker-dealer space. In 15 years, I think the top eight firms will have 75% to 90% of the revenue. This is just the normal consolidation process of any maturing industry. The key for advisors and B-Ds is to recognize it and use it to their benefit."