Raymond James has long stressed the fee side of the business, and that has held up remarkably well. The firm continues to add services in this arena. "The fee-based methodology has been validated," Averitt says. "Clients aren't complaining about fees like many expected they would in a long bear market."

This fall, business at many firms has picked up since the dog days of summer, when the markets were plunging as a potpourri of corporate accounting scandals unraveled at a disturbing pace. "I'm a little concerned that clients will start to think we're out of the bear market when that could still be premature," Averitt says, while acknowledging that the downside risk isn't what it used to be. "Still, it's a good time for a long-term investor to buy quality stocks even though they may be a little cheaper six months from now."

At the nation's largest independent brokerage, LPL Financial Services, the firm's rep count is up 10% to 4,400 producing reps. For several years, LPL has emphasized its independent investment research unit, and as scandals over conflicts of interest engulfed many of the nation's largest wirehouses, the research department was truly able to differentiate the firm.

Jim Putnam, LPL's managing director of marketing, estimates that the firm's revenues will climb about 6% in 2002, with the average rep's business falling about 4% or 5%. "Some of our people are having record years, but even for them, it's hard to be exuberant when [so many folks are suffering out there]," he says.

Like Raymond James, LPL is seeing some signs of office consolidation within its own advisor ranks. "It's mostly for economic reasons or service- and idea-sharing," Putnam says. "People are not taking on neophytes like they were a few years ago."

One development that the bear market has spurred at LPL is an acceleration in the adoption of technology. Today, 90% of the firm's trades are executed online, compared to 40% two years ago.

Mutual Service Corp. has also made technology and training an integral part of recruiting efforts, says Vince Cloud, the broker-dealer's executive vice president and chief operating officer. Mutual Service, for example, has created coaching programs on several topics, including a program that helps advisors evaluate alternative investments.

The company has also launched an effort to recruit advisors from wirehouses, where younger prospects are growing discouraged by increases in minimum production quotas, Cloud says. Like Commonwealth, Mutual Service has benefited from the fact that market consolidation has caused dissatisfaction among the ranks of some competitors. Cloud says his company has had its best recruiting year ever in 2002, when it brought in 200 new advisors amounting to about $20 million in new production. "There are some interesting opportunities out there," Cloud says. "The trick is you have to display stability and a long track record, and you can become attractive."

As the bear market has forced reps to offer more services to remain competitive, Mutual Service's CEO, John Dixon, has seen a resurgence in comprehensive financial planning services. Emphasizing asset management is no longer enough, and that's a positive development, he concludes.

At Capital Analysts in Radnor, Pa., one of the focuses in recruitment has been the implementation of services that assist advisors with day-to-day practice management. As one example, the company recently launched a managed stock program in which advisors can pick from several stock portfolios that are managed by Capital Analysts. "That has come out of a growing need from (advisors) for expanded services, and for different ways to compete in the marketplace and to differentiate themselves in a cost-competitive way," says Steve Mayhew, the broker-dealer's senior vice president of investments.