Related: How to Become a Financial Advisor
Financial advisors have stopped jumping from firm to firm after two years of defecting to boutiques and independents from the so-called wirehouses: Bank of America Merrill Lynch, Morgan Stanley Smith Barney, UBS and Wells Fargo Advisors.
The big houses are paying record-high retention packages. Some are offering bonuses triple a broker's production for the most-recent 12 months, according to Aite Group and several hiring managers.
"It's definitely a more difficult environment for recruiting," said Scott Curtis, a senior vice president of the private client group at Florida-based Raymond James Financial Inc., a investment advice shop that competes with the wirehouses. "The retention bonuses have made it challenging. The senior-most management teams at these firms have now been there for a period of time. The equity markets are better, and advisors don't think they're in a situation where their employer might go out of business or be sold any day."
The focus for asset managers in 2011 is attracting quality candidates, rather than hitting large hiring goals. Almost every recruiter interviewed for this piece described their hiring strategy for the year as "opportunistic."
"We're back to more of an equilibrium type of a hiring environment," said Chip Walker, a managing director leading integration and recruiting efforts at Wells Fargo Advisors. "There's no question we want to net grow our headcount, but a lot of that is determined by the business conditions and the opportunities before us."
Specifically, Wells Fargo is trying to hire women and minority advisors in an attempt to win business in communities that have been overlooked by competing brokerages.
Morgan Stanley Smith Barney is not planning to grow ranks, though it will be on the lookout in signing on advisors with a track record of success, according to spokeswoman Christine Pollak.
Bank of America is taking a similar tack with Merrill Lynch, although the firm is "aggressively" hiring for U.S. Trust, its private wealth-management unit, according to spokeswoman Selena Morris Difusco. Bank of America declined to describe the scale of that effort; U.S. Trust had almost 2,300 advisors at the end of 2010.
Charles Schwab plans to add "a modest number" of advisors throughout its retail branch network in 2011, according to spokeswoman Sarah Bulgatz. The firm declined to talk about how many advisors may join its independent platform.
Smaller companies are planning to be slightly more aggressive. Raymond James, for instance, is trying to add roughly 150 people to its ranks of 1,300 in-house advisors.
"We're not overly focused on a particular goal," Curtis said. "We don't want to just hit the number and know there's no chance in the world (the new hires) are going to make it."
Edward Jones, the St. Louis-based investment advisor, is hoping to grow its ranks by 600 this year.
The recruiting will be a combined effort aimed at luring experienced talent and enlisting career changers who "bring a little life experience to the table," said Dan Timm, a partner at Edward Jones responsible for branch development.
Last year, Edward Jones signed on 50 experienced advisors from other shops. At the beginning of 2011, it charged the managers of its 231 different regions to each swipe a talented advisor from another brokerage this year.
Though wirehouses have slowed the tide of defections, platforms that allow advisors to function independently haven't lost favor, particularly among proven brokers, according to Mindy Diamond, founder of New Jersey-based recruiter Diamond Consultants.
They are attracted by business models that don't encourage them to favor certain investments.
"What happened in 2008, 2009 and 2010 made many people wary of the wirehouse space," she said, noting that many advisors with high net-worth client bases signed on in the wealth management units of investment banks like Barclays and Credit Suisse.
Diamond expects to place about 100 professionals this year across the industry, up from 70 or so in 2010.
Washington, D.C.-based Convergent Wealth Advisors is welcoming a wave of candidates who started independent advisory shops during the crisis and were challenged by the details of running and marketing a business. The firm is hiring at all levels to meet increased demand in Los Angeles, New York and Washington.
Douglas Wolford, president of the firm, said Convergent has seen a surge of new clients in Hollywood's entertainment industry. "Clients are very hesitant to deal with the very small businesses and they're also very hesitant to deal with very large businesses," Wolford said. "We tend to occupy that sweet spot in the middle."
Write to Kyle Stock
Related: How to Become a Financial Advisor