Many advisors who will be unable to sell commissioned investments in IRAs after the DOL rule goes into effect are being forced to shop for new homes.

Firms and recruiters are seeing an uptick in the number of inquiries by reps looking for firms that will accommodate commission business. Some firms appear to be waiting to see if the rule survives, but that’s a big risk, observers said, because advisors can’t be stuck come April, when the rule is set to go into effect, with no way to do business.

“A fair amount of smaller B-Ds are not open to the BICE contract,” said recruiter Jon Henschen. “These small and midsized B-Ds have a lot of transactional business, and for [commissioned-based] reps, it’s a really big deal.”

The best-interest contract exemption, or BICE, allows brokers to sell commissioned investments to IRA owners.

Henschen said he’s targeting about 10 B-Ds that have told reps they won’t be using the BICE. He declined to identify the firms for competitive reasons.

“We have never had so many live recruits,” echoed Steve Distante, chief executive of Vanderbilt Securities based in Woodbury, N.Y., an independent dealer that will be using the BICE.

Distante said he was talking with eight potential advisor recruits, most of them individuals or OSJs affiliated with small B-Ds.

“They’re just tired of how their firms are reacting” to the DOL rule, “with indecisiveness or dictating that ‘This is what we’re going to do,’ without the proper information,” he said.

John Straus, chief executive of FallLine Securities, which targets high-end hybrid breakaways, also says his recruiting activity is picking up as a result of the DOL rule.

“We’re having dozens and dozens of those conversations as we speak, and I expect a number [of advisors] will decide to leave,” he said.

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