Amy Webber, the president and CEO of Cambridge Investment Research, says that for three years her firm saw its highest volume of recruiting levels in its history, but that’s slowed in 2019. “We attribute the slower pace earlier this year to some firms in the industry, which are paying front money to all prospective advisors at high levels regardless of the quality of the advisor,” she said in an e-mail. “We have also seen a trend where certain advisors prefer to join a local enterprise branch (super OSJ) of ours. … Advisors on the move can choose to join us direct or explore the unique niche offerings found in many of the enterprise firms with Cambridge.”

She adds that advisors who want to move are also taking longer to decide. “This seems to be for a variety of reasons, including basic economic and market dynamics that affect an advisor’s inclination to make a change, but interestingly it also seems to be that it is a much more complicated process to sort through the variation of the deals being made.” She adds that many firms are shrinking their offerings and “an advisor has to be very careful about making sure that they understand what they are signing up for to obtain the highest levels of comp and up-front that are being offered.”

Meanwhile, Webber says, a subscription fee model is already being used in several advisor offices at Cambridge to serve younger clients.

Rich Steinmeier, the head of business development at LPL, says certain advisors value higher transition assistance moving over because they may suffer more “breakage” (losing money on accounts not moving during the transition). “We have increased our flexibility to either extend the duration of [transition loan] notes or, for the term of the notes, take payouts slightly down to see a higher transition assistance package.” LPL’s size as the largest B-D (with 16,000 reps) offers it a bigger sample size of what advisors are looking for, he notes. “We have probably seen more transitions than any other firm,” he says. He says that LPL’s basing of transition assistance on AUM is not because the broker-dealer world is trying to look more like the custodial world. “It’s the right way we think of an advisor’s practice. The revenue composition of a practice can evolve over time. And we think the truest underlying gauge of the existing practice and future potential of that practice is actually the assets under management. And so we think it’s a fairer representation.” 

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