If 2009 was a banner year for independent broker-dealers to recruit new talent away from several imploding financial giants, 2010 will probably go down as a year of transition.

So far this year, independent B-Ds have faced heightened competition from wirehouses and RIAs paying higher compensation packages. But as the dust settles, the independent B-Ds have again begun recruiting in greater numbers. Sometimes it's through mergers and acquisitions. Sometimes it's by luring candidates with new strategies and better support services.

But they still face formidable opponents in wirehouses and RIAs, says Mindy Diamond, the president of Diamond Consultants, a search firm that focuses on financial advisors.

"The wirehouses are paying 330% deals," she says, "meaning a top quality advisor can get paid almost three and a half times his trailing-12-month production. But it's not all up-front. Only about 140% of that 330% is paid up front. The rest is earned by hitting certain bogeys tied to assets and revenues."

Diamond agrees that 2009 was an excellent year for recruiting-for both independent B-Ds and wirehouses like Morgan Stanley and Merrill Lynch alike. The beginning of this year was slower, she says, but the recruiting activity has picked up in the last couple of months.

Now the industry's participants are looking ahead to 2011 for new opportunities.

"I view 2010 as a year of transition," says Bill Van Law, the national director of business development for Raymond James Financial Services in St. Petersburg, Fla. The year 2009 was the best year the industry ever saw for recruitment, he says, but 2010 hasn't lived up to that.

However, he says, you have to put the firm's 2010 numbers in historical perspective: They were still 60% higher than they were in 2007, he says, and he is looking to 2011 to be even better.

"The trends are certainly in the right place," he says.

Most independent B-Ds gobble up new advisors from sources such as insurers, banks and other independent advisories. The vast majority of new recruits to Raymond James Financial, however, come from the wirehouses.

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