LPL Financial Services, the nation's largest independent brokerage, reports that its 5,500-rep network grew at a 12% clip in the first half of 2004, according to Bill Dwyer, managing director of branch development. Early in the 2000-2002 bear market recruiting slowed, since many reps were afraid to move, but things changed in late 2002 when many wirehouses closed branch offices and let reps go. Consequently, recruiting from wirehouses exploded last year.This year recruiting has been evenly distributed from a variety of different sources, including regional firms, wirehouses and insurance-owned brokerages, Dwyer says. Like other firms, LPL is searching for ways to help their branches grow internally and make sure reps' clients will be happy if they switch brokerages.

"They want this to be their last move. Payouts are very similar," Dwyer explains. "It's a question of the value proposition. How can a rep, 1) grow his net income, and 2) build equity in his firm." With the prospect of LPL going public, the firm is devising a stock bonus plan based on production levels, recurring revenues and tenure.

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