Although consumer and investment advisor groups have criticized the SEC’s new Reg BI, which was designed to replace the DOL rule, “even Reg BI makes it harder to do commission business,” Bloom says. “Positioning yourself as a fiduciary” today can help drive business.

On the recruiting front, Commonwealth finds itself talking to larger firms than it has in the past. Most of the teams have five people or more and between $350 million and $650 million in assets under management. So far this year Commonwealth has recruited 53 reps generating almost $26 million in revenues.

Raymond James said in its SEC filings for the end of the first quarter of this year that it had added 258 advisors (139 employee advisors and 119 independent contractors) since the end of the first quarter of 2018, for a total financial advisor count of 7,862.

In May, LPL said it was cutting its transaction charges for certain ETFs by 45% from $9.00 to $4.95, a move designed for its hybrid and RIA reps that encompasses funds by State Street, Invesco and WisdomTree. Last year, the firm said it would charge a flat admin fee of 8 basis points to advisors with $25 million to $50 million on its Strategic Asset Management advisory platform. Competitors are charging around 10 to 15 basis points for the same things, says Jon Henschen, a recruiter with Henschen & Associates, and the firms are also charging markups on mutual funds that can be as high as 25 basis points, he says. Some firms are bashful about that. Others are brazen. 

Scale is helping the bigger firms get bigger because they can more ably cut the fees they are charging advisors on the back end. “The bigger firms have continued to offer pretty attractive transition packages to move over,” says Jodie Papike, the president at recruiting firm Cross-Search. These typically include inducements beyond payouts such as forgivable loans, for five years perhaps, and transition assistance.

But firms are also getting creative to lure talent, offering RIA-only options for example. They are not “necessarily saying how they are going to structure that yet, but kind of introducing that as a potential platform option for [advisors],” Papike says. The concept is: “You want to be independent, but what form of independence makes the most sense for you?” she says.

Better Tech

Better technology is not the thing that makes an advisor switch firms, but it’s almost always toward the top of the list, Papike argues. The advisor’s satisfaction with the B-D tech offering often depends on what he or she wants from the software—a paperless office? An integrated platform? Better mobile technology or e-signatures?

And many independent B-Ds are not getting on the stick with these higher tech expectations, Papike says. She notes a huge gulf between the tech haves and have-nots. “It’s really staggering to see how far some firms have taken it,” she says. 

Jim Nagengast, the CEO of Securities America, says that whereas 20 years ago, advisors wanted e-mail, today they all want client portals, cloud access and the ability to keep using their favorite software with the platform. All clients want to work electronically and have access to documents. Cybersecurity is another issue that advisors are struggling with and need help on.