Advisers are leaving the biggest wire houses to work at banks, regional brokerage firms and independent advisory companies at a more rapid pace than in January, according to a report from the research firm Discovery Database.
Of advisers who left wire houses in July, less than 30% went to another wire house, versus 70% in January, according to the report, which the Shrewsbury, N.J., firm released Wednesday.
Philip Palaveev, the president of Fusion Advisor Network, said the wire houses experienced "seismic shifts" earlier this year because of the financial crisis, which altered the firms' structure dramatically. "There has been such a massive change in the compensation models and in the career expectation of advisers working in wire houses that there was a major reshuffling," he said.
In July, 18% of wire house brokers who left went the independent route and 16% went to regional firms, such as RBC Wealth Management and Raymond James Financial Inc., according to Discovery Database.
The July report shows Morgan Stanley Smith Barney, now the largest brokerage, lost roughly 365 advisers. The combined firm had 18,500 advisers at the end of the June.
Morgan Stanley entered into a joint venture with Smith Barney, the brokerage arm of Citigroup Inc. The deal gave Morgan Stanley 51% ownership of the joint venture and Citi 49%. A spokeswoman for Morgan Stanley Smith Barney said that the vast majority of the departures were low producers who were not offered retention packages in the merger and that there has been "virtually zero" turnover of advisers in the top two quintiles.