There has been talk (and verification) of expansion in both wirehouses and regionals all month long.

Just this week BofA Merrill announced it planned to continue to hire and build its core global wealth management business. (They hired an additional 1,697 new financial advisors in 2011.)

Then Edward Jones announced they were rolling out a new recruitment force to hire 700 + financial advisors this year, targeting expansion throughout the US and Canada, including hubs in Seattle, San Francisco, LA, Phoenix, St Louis, Kansas City, and Denver.

Wells Fargo has added three new financial advisor teams who previously oversaw $728 million in client assets in their Port Richey FL, Scottsdale AZ, and San Jose CA branches.

UBS has also shown some hiring activity, putting a high premium on some disgruntled Merrill advisors.

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Industry analysts continue to debate over who will acquire Regions Financial’s brokerage firm, Morgan Keegan, but nobody is commenting or confirming anything.

The haggle is obviously over price, but it looks doubtful it will be the $1 billion that Regions is looking for.

After all, this has been in the works for over six months now and ever since the failure to solicit private equity investors and failed promises to their advisors, the obvious is out there.

Either deal — with Stifel or Raymond James, is going to mean a different operation and more change and my gut feeling is they’ll lose a lot of advisors…they are already making calls and looking around.

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UPDATE!

Raymond James acquires Morgan Keegan for $930 million. Read more here…

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Our President and CEO, Bill Willis, member of OnWallStreet’s elite Recruiter Roundtable, has this to say regarding 2011 brokers on the move and what’s in store for 2012:

It was a good year for us and better than the previous year—and ending strong. That foreshadows a very strong 2012. There are really two reasons for that: retention packages are amortizing. There is less in those packages, and firms are getting more aggressive. That combination makes the numbers work for some people

Read the full discussion.

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How often do you find yourself saying “I can do this tomorrow”? If you are like most people, you say it more often than you’d like, and it’s frequently about tasks you are not too keen about doing.

But what about those times you say it about something that you would really like to do or enjoy doing, but just don’t feel you can because of the day’s pressing obligations?

I found myself thinking that the day after Christmas. So instead of cleaning out the garage, going to the office to “prep” for next week or writing this week’s blog articles, I actually stopped and thought…Whoa! How many “tomorrows” are there for the enjoyable bits of life?

So, I took some of those “tomorrows”…I hope you did too and that as you reflect on 2011 and prepare for 2012, you’ll include more of those enjoyable days when you don’t say…”I can do that tomorrow.”

A Happy and Prosperous New Year to you and yours!

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A sigh of relief came from the 17,291 global-wide financial advisors at Morgan Stanley last Friday when a spokeswoman from MS told OnWallStreet that advisors would not be included in the cuts planned for the first three months of 2012. (A Bloomberg story had broken the day before that 1,600 jobs would be eliminated.)

According to the spokesperson some other positions within the wealth management sector would be eliminated but they would not be advisors.

It was noted that MS financial advisors have average annualized revenue per rep of $747,000 and total client assets per rep of $90 million — so, who in their right mind would want to cut that?

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Although final decisions are weeks away, some reports issued recently are predicting that average 2011 bonus compensation at global investment banks will drop 15% to 30% from last year.* ( At the same time, compensation in the rest of corporate America is rising, mostly due to aggressive cost cutting.)

Banks, too, have been cutting back during the first three quarters of the year and have reported that business has been hurt by global economic uncertainty, volatile financial markets and tough new regulations from Washington. Investors have sent shares of investment banks and brokerages down 43% this year.

But the cutbacks have not hit all divisions equally according to The Options Group, a compensation consulting firm.

“Traditional mergers and acquisitions bankers may see their pay fall 14%, but bond traders face 33% pay cuts due to the rock-bottom interest rates that make trading difficult”.

NOTE: “Even these drops won’t stop finance from being one of the most lucrative professions; for instance, Goldman Sachs set aside enough money through the first nine months of the year to pay each of its 34,200 employees an average of $292,000 in total compensation this year and that is likely to grow in the fourth quarter.”*

*Los Angeles Times, Dec 3, 2011 “Wall Street Compensation Expected to Fall….”Nathaniel Popper, reporting from New York.

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Read an interesting article in the December edition of OnWallSteet.

Written by Dr. Denise Federer, clinical psychologist, executive coach and founder of Federer Performance Management, she has been a consultant to the financial industry for 25 years.

Her “Advisors Guide to Stress Management” can be found below, and is based on the premise that we cannot control the environmental events which cause the stress, BUT we can control our reactions to that environment by anticipating, staying focused and taking certain actions.

Her 3 point strategy plan is pretty straight forward but not always easy to implement.

1) Keep a Stress Management Log: Record the stressful situations you experience over a two-week period. Be sure to include your stressors, your stress reactions and your current coping responses.

2) Create behavioral strategies for managing your own stress: After recognizing circumstances that “set you off” and patterns in how you typically respond, the next step is to modify your current ineffective behavior and substitute more effective coping responses.

3) Create governance rules for your business: Predictability, consistency and accountability are essential for ensuring client confidence. Take the initiative and create office policies that will help you manage your own work-related anxiety, along with client expectations.

Read the full article for more detailed information.

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Independent or Wirehouse business practice?

During the past two years this has been the big debate in the industry…who’s moving where and what are the pros and cons of each?

What misconceptions are being fostered within the two worlds?

Are the Wirehouses recruiting the Independent Advisor now?

For an insightful look at what is currently happening, I encourage you to read the September edition of OnWall Street “Is Now the Time to Head to Wirehouses?” by Bill Willis, President and CEO of Willis-Consulting.

Bill is a frequent contributor to Business and Financial publications regarding current trends in the industry.

It’s worth the read.

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Banks across Wall Street are honed in on cutting costs lately and it looks like the cuts will be hitting advisor training programs next year.

Morgan Stanley Smith Barney announced they will bring on fewer recruits to its advisor-training program, reducing its current year count of 1,750 trainees to just 1,250 next year.

However, despite the smaller class size, division head Greg Fleming says the brokerage “still expects to ultimately have the same number of trainees succeed thanks to better selection of candidates and better integration of trainees into teams.”

Trainee class sizes vary widely across the four big brokerages. Merrill Lynch plans to hire 1,500 to 2,000 trainees this year, while Wells Fargo said it’s aiming for about 800 and UBS Wealth Management Americas has cited a target of 175.

(Noteworthy is that MSASSB boasts the largest headcount in the brokerage industry, with 17, 638 advisors. But its headcount has dropped a bit in recent quarters. The company attributes the decline to the pruning of lower producers, and has said it will continue to let go of underperformers.)

If you are a financial advisor thinking about making a change, send us a resume and we can talk about the job opportunities available.

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It appears that some of the wirehouses are misinterpreting the guidelines regulating the S.A.F.E. Act of 2008, resulting in negative effects on the careers of some Financial Advisors. As financial recruiters, Willis-Consulting is aware of these issues, and encourage any FA’s who are being effected to contact us for more information and advice. As a background to this issue, please read on…

The S.A.F.E. Mortgage Licensing Act, or Secure and Fair Enforcement for Mortgage Licensing Act of 2008, created a nationwide mortgage licensing database that provided for minimum federal regulations for those who write mortgage loans. The act compels those who write loans to submit to education, testing and background checks to ensure their suitability to provide this service. As a part of the Housing and Economic Recovery Act, each state was required to create its own law to comply with the S.A.F.E. Act. .

The S.A.F.E. Act sets requirements for both individual mortgage loan originators and institutions regulated by the mortgage industry. To be eligible for registration under the S.A.F.E. Act, loan originators are required by the federal government to take at least 20 hours of classes at an institution licensed to teach it. In some states they may be required to take up to five hours of additional education, based on their state’s standards. They must pass both a federal test and a state test. Each state has its own testing requirements; some states allow loan originators who move into their state to submit a passed test in their previous state in lieu of a new state test. Once a license is obtained, under the S.A.F.E. Act the loan originator must complete eight hours of continuing education per year.

Another critical component of the S.A.F.E. Act is a credit and criminal background check for all loan originators. A loan originator may not obtain a license if he has ever had his license revoked or has ever been convicted of financial crimes like fraud or money laundering.

Individuals who are registered under the S.A.F.E. Act must maintain that registration as long as they are loan originators. That includes their unique identification number, which remains with them even if they change companies. Agencies are required to comply with the S.A.F.E. Act and only employ those who are fully registered.

For more information, contact us at: 480-361-9490.

Patrick Kelly

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