More than 1,500 advisers have left the wirehouse channel so far this year, a 37% increase over the departures in the first half of 2020 but in line with prepandemic trends, according to an analysis of the InvestmentNews Advisers on the Move database.
Most advisers who leave wirehouses seek a measure of independence and move into another channel entirely, most commonly joining a broker-dealer. However, 21% of the advisers who exited a wirehouse during the past 12 months moved on to one of the three other wirehouses.
Morgan Stanley & Co. has dominated this wirehouse-to-wirehouse recruiting since 2020. The firm recruited 200 advisers on net from its competitors Merrill Lynch & Co Inc., Wells Fargo & Co. and UBS Group over the course of last year as it reversed the downward trend in its head count. It’s nearly matched that net gain in the first half of 2021.
Net Recruiting – Wirehouse to Wirehouse
|UBS Financial Services Inc.||-56||-45||-61||-108||18|
|Wells Fargo Clearing Services||87||74||170||41||-96|
|Merrill Lynch Pierce Fenner & Smith Inc.||-108||-66||-147||-133||-101|
To be sure, much of the recruiting by competing wirehouses merely offsets others who leave to join a broker-dealer or RIA. But in total, Morgan Stanley added a net 61 experienced advisers through recruiting over the first two quarters of 2021. That’s notable because wirehouses have in recent years shied away from expensive recruiting deals to focus on developing professionals from among their ranks and gathering more wallet share from existing clients.
In addition to recruiting, Morgan Stanley added advisers with its acquisition of ETrade Financial, which boosted its head count 3.1% to nearly 16,000 at the end of last year. The firm no longer reports adviser totals within its wealth management business.
While the ETrade integration provided a one-time boost to Morgan Stanley’s head count, CEO James Gorman suggested that the addition of a new channel has been a game-changer for the firm’s advisers.
“We’re creating an adviser channel, which actually has deep organic growth flavors in it,” he said on a recent quarterly earnings call. “And if you look at our attrition numbers and the weekly hiring numbers, I mean they are fantastic.”
Morgan Stanley was the only wirehouse to gain experienced advisers on net during the past 12 months, according to the database.
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