Excerpted from “Wirehouses Go Big With Recruiting Deals; Three Key Strategies for Advisors Wanting In”, by Frank LaRosa

There has been a flurry of recruiting activity as of late in financial services as wirehouse and other W-2 firms have ramped up recruiting activities. The primary focus, as evidenced in numerous daily media headlines regarding advisor moves, has been on large teams or advisors with significant books of business totaling in the millions – if not billions – of dollars. So why the sudden push by wirehouse and W-2 firms to ramp up their recruiting efforts? The answer is a simple one and it comes down to basic economics.
The COVID-19 crisis pummeled the profit and loss statements of all of the major wirehouse firms throughout Q2, leaving much ground left for them to gain if they are to end 2020 with any positive – if not steady – numbers on their balance sheets. One of the most tried and true methods of adding assets to the balance sheet for wirehouses has always been acquisition and it is no surprise that these firms are turning to this strategy again. By using recruiting measures to acquire large teams or advisors with significant AUM, wirehouse and other W-2 firms give a fast injection of capital to balance sheets in need. In the current market, with recruiting competition strong, wirehouses are pulling out all the stops to achieve this goal offering extremely competitive and financially lucrative recruiting packages to top teams and advisor prospects.
Which begs the question, how does an advisor evaluate the growing recruiting opportunity for the benefit of themselves, their practice, and their clients? Three simple strategies hold the key to charting the right course when considering the bevy of recruiting packages on offer.
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