Bill Morrissey, LPL’s managing director of business development, wouldn’t confirm if the firm is still on track with NPH reps, nor would he speculate on what the final head count would be. But LPL’s recruiting efforts have continued apace, he says. “We did not overly divert our recruiting team to focus on NPH.”
The recruiting outlook for this year “will look a lot like 2016 and 2017,” Morrissey says, with movement driven by profit-margin compression among B-Ds that can’t make needed investments, a tougher regulatory environment and more consolidation.
At the Advisor Group, recruitment of fee-based assets came in 30% above target for the year, according to Jamie Price, the company’s chief executive. In fact, it “was the best recruiting year in the history of the company,” he says.
The Advisor Group does not disclose recruited head count or revenues, but it also landed some large NPH offices. Next year’s pace should fall to more normal levels, Price says, although major consolidation “would create larger than normal opportunities.”
Commonwealth Financial Network, considered the most selective independent B-D, also had a record year last year, helped by concerns about the DOL rule implementation and the NPH deal, says Andrew Daniels, the company’s managing principal of business development.
As of late December, Commonwealth had added about 150 advisors with just over $62 million in production, he says, including some $17 million from 29 NPH-affiliated recruits. The firm lands about 100 advisors in a normal year.
The NPH reps Commonwealth nabbed were “used to a more intimate connectivity with their firm … and were concerned that they weren’t going to get that” at LPL, Daniels says. This year should “be equally as good, because I think there will continue to be turbulence and a flight quality,” he adds.
According to Scott Curtis, president of Raymond James Financial Services, recruiting at his company ran “well ahead of last year” in its fiscal first quarter, ended December. And the full years of 2017 and 2016 were both good years, Curtis says, although the all-time record came in 2009 as wirehouse and regional recruits joined in droves following the financial crisis.
“My belief at this point is that we will surpass last year’s results,” Curtis says. RJFS doesn’t report recruiting data, but as of its September 2017 year-end, the independent unit had 4,305 advisors, up by 257 from the previous year. Among all brokerages, recruiters believe Raymond James’s various platforms, including its division for employees, was able to capitalize on the exodus from wirehouses better than any other independent firm.
But the Raymond James results last year were not driven by the addition of NPH reps, Curtis adds. “We just haven’t found many who would be a good fit,” he said. “We’ve found that advisors at NPH are heavy in variable annuities, and that’s not typical for us.”