For Cetera Financial Group, last year was “not the best year ever, but close to it,” says Adam Antoniades, president. Cetera doesn’t share recruiting data, but Antoniades says his firm’s B-Ds saw “an awful lot of at-bats because of the NPH deal.”
This year should be strong, fueled by industry consolidation, he says. “We raised our goals significantly [for 2018], based on the trajectory of our pipeline.”
Remarkably Upbeat
After robust results last year, B-Ds remain remarkably upbeat about recruiting, given a number of underlying trends.
For one thing, there’s a lot of soul-searching going on. “A lot of advisors are not happy right now,” Nagengast says. Advisors are evaluating whether their current firms are where they want to be for the long term, and they are finding that “their current partner is just not the one for their future,” he says.
Fears of an ownership change at their B-Ds are rife among reps. As smaller firms sell out to larger firms, brokers feel they become “just a number [and] become frustrated that they become less important” to their B-D, Webber says.
Case in point: Following the NPH announcement, many of the advisors at the NPH firms had just a couple months to make a decision about staying with the much-bigger LPL.
As a result, Nagengast thinks advisors will be more proactive in lining up possible alternatives should something happen to their existing firms. “What we saw in 2017 was that advisors want to control the process, and evaluate their [B-D] alternatives on their own timetable,” he says.
Although it’s on the back burner for now, the DOL’s fiduciary rule will continue to drive movement, observers say, as B-Ds implement policies to comply. Firms that maintained commission business in retirement accounts and maintained broad product choices are using those decisions to their advantage.
B-Ds also enjoy an advantage if their platforms are flexible—accommodating B-Ds, independent RIAs and corporate RIAs, and offering reps options to use multiple clearing firms and custodians. At the same time, companies are upgrading their technology, practice-management support and succession-planning capabilities.