Adviser departures slow at top brokerages in 2013

Tue Jul 9, 2013 3:06pm EDT
 
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By Ashley Lau

NEW YORK (Reuters) - Following a year of heavyweight adviser departures at the biggest U.S. brokerage firms, a smaller number of top teams have bolted in 2013.

The decline, with moves by financial advisers down by roughly a third in the first half of this year compared with the same period last year, is good news for the firms, which typically lose large revenue streams because departing advisers take their clients with them.

All told, about 200 teams of veteran advisers moved through the end of June, down from about 300 during the same period last year, based on Reuters data, which tallies the moves of adviser teams that manage around $100 million or more in client assets.

Advisers who moved in the first half of this year managed $40.2 billion in client assets, compared with the $59 billion in client assets managed by advisers who moved in the same period last year.

"So far the big firms have done a good job stabilizing their advisers," said Alois Pirker, a research director at the Boston-based Aite Group, noting the lower level of departures from the largest U.S. brokerages.

Greg Fleming, the chief of Morgan Stanley Wealth Management, noted a decline in attrition among Morgan Stanley advisers across the firm when he spoke at the Reuters Global Wealth Management Summit in June, and he and other top U.S. brokerage chiefs pointed to stronger markets as a factor in the trend.

Strong markets make advisers less likely to leave because the performance of client accounts typically tracks strong markets. The S&P 500 benchmark index was up roughly 15 percent year-to-date through Monday.

Recruiters and industry lawyers said because of the volume of big team departures in 2012, when at least 16 teams that each managed $1 billion or more in assets made a move, the overall pool of top teams looking to switch firms has shrunk, which has translated into fewer moves this year.   Continued...