With the technology in place, once advisors began to settle in working from home and the initial shock of the pandemic wore off, it became business as usual for many independent advisors who were already used to having flexible work arrangements, Diamond says. Still, “I think the same motivators these advisors had, to look around, or to leave prior to the crisis, are still in place.”

LPL’s second-quarter recruiting numbers are not available, and Steinmeier declined to provide to-date recruited assets for the quarter. The company’s reported advisor head count stands at 16,763, up 299 from the fourth quarter of 2019 and up 574 year-over-year.

Steinmeier says the firm’s net promoters score, a gauge of client loyalty, also increased over the last 18 months. He and Advisor Group’s Johnson downplay the idea that money remains the big driver in motivating an advisor to join a firm. Johnson says the discussion with potential advisors usually centers around questions like “What can one of our B-Ds in Advisor Group do to help me grow my practice? What are you going to do to help me become more efficient?”

Tim Stinson, head of sales and wealth management at Cetera Financial Group, says his company offers financial incentives in the form of signing bonuses, forgivable loans and package access to discounted resources, but he also says it is more than the money that attracts advisors to the firm.

“At Cetera, we believe in people over numbers. We are here not only to grow assets, but to seed long-term value through the delivery of independent advice. That really resonates and motivates recruits because so many financial professionals are seeking a stronger team dynamic. We encourage all recruits to function like CEOs of their business where they assess core economic and valuation drivers such as transition assistance, payout, ticket charges, platform pricing and affiliation fees,” Stinson says.

But Nash and Diamond stand firm when saying that economics are the driving force in a lot of the decisions. “There are definitely advisors who don’t lead with the money,” Nash says, “but there is a significant amount of advisors who are making moves as a result of the money.”

He adds that a lot of advisors will scope out the marketplace to see what is out there—if there are firms with better technology, firms with better service that are doing things differently. Then on top of that they will consider the money. “Look, the technology is actually better, the service is better than mine and I can make all this money. And that makes a lot of people make changes to firms,” Nash says.

Diamond agrees. “The economics are definitely important, not just the up-front payment the broker-dealers [offer], but the ongoing fees.”

Facing Down Regulations
Independent broker-dealers have been anticipating the Securities and Exchange Commission’s Regulation Best Interest, which was set to take effect on June 30. Nash argues that, like the pandemic and the recession, Reg BI is going to increase advisor movement in the insurance B-D space. He points to the many insurers such as John Hancock and Allianz that sold their independent broker-dealers because they did not want to deal with the product lines.

“So we start looking at little things [with] Reg BI,” Nash says. “If people don’t have a Series 65 license, they can’t even call themselves an advisor. So there are some real clear distinctions with Reg BI in the insurance products versus the distribution side, which is the B-D side.”

And while some IBDs are taking a wait-and-see approach, others like Advisor Group have been proactively educating their clients. Johnson says regular communication has been going out to advisors going back a few months, and most recently, the company did a 21-city executive town hall series for advisors on Reg BI preparedness. “And now that we are really close, we are doing webinars, educational sessions,” he says.

Steinmeier says LPL is fully prepared to meet the requirements of Reg BI. “Our advisors will have access to all of the training and capabilities they need to be compliant. We are full steam ahead and ready.”

Advisors also are looking for stability, says Jodie Papike, a partner with advisory recruiting firm Cross-Search. She points out that a lot of firms have been undergoing changes, whether it is consolidating their back offices, reducing back-office staff or changing the structure of their business.