(Washington)

The SEC’s Reg BI and the DOL’s return of the Fiduciary Rule are set to shake up the industry in several ways (though to a much smaller degree than the 2017 version). However, one of the lesser appreciated areas of disruption created by the rules is in advisor recruiting. Big independent broker-dealers think that the regulatory strain that the rules will put on smaller firms means there will be an exodus of brokers. The logic is that many brokers will feel their small firms do not have the resources, and are therefore not offering the infrastructure to adequately support broker compliance. Accordingly, many big shops like LPL, Ameriprise, and Stifel are planning efforts to seize on this recruiting window.

FINSUM: This makes good sense and it does appear that it will be an ideal time to poach brokers from smaller firms.