CORRECTED-Falling behind on recruitment, Ameriprise gets aggressive

Thu Jun 12, 2014 2:36pm EDT

(In first paragraph, deleted description of Ameriprise as a regional firm)

By Elizabeth Dilts

NEW YORK, June 12 (Reuters) - Independent brokerage firm Ameriprise Financial has ramped up efforts to win top financial advisers by matching the signing bonuses offered by the nation's biggest brokerage firms.

Regional independent brokerage firm Ameriprise Financial has ramped up its efforts to win top financial advisers by matching the signing bonuses offered by the nation's biggest brokerage firms.

The strategy, coming at time when its efforts to recruit high end brokers have lagged competitors, was announced on a recent call with analysts and recruiters. It raises signing bonuses to 150 percent of an adviser's last 12 months of revenue, from 120 percent, for those that bring in $830,000 or more. It would also offer signing bonuses of 150 percent for so-called "second quintile" brokers who bring in $585,000 in revenue.

Since Oct. 31, Ameriprise has drawn just eight brokers who had more than $100 million in assets under management in the trailing 12 months, according to the firm's own announcements tracked by Reuters. During that same period, regional independent firm Raymond James hired 32 new brokers with at least $3.2 billion in client assets under management in that time, according to the Reuters database.

By raising minimum signing bonuses in the top group to nearly $1.25 million from around $1 million, Ameriprise is entering into the same recruiting arena as UBS AG America , Morgan Stanley, Bank of America's Merrill Lynch, and Wells Fargo.

"Ameriprise is very competitive with the big brokerages," said Tom Lewis, a lawyer at Stevens & Lee who advises moving brokers. Bonuses are one part of the entire recruitment package, and Ameriprise did not immediately disclose other details, such as what it will pay new hires who bring at least 80 percent of their client assets with them.

Ameriprise has worked for several months to recruit top advisers to improve its industry cache, Lewis said.

The firm has also been mailing recruitment letters directly to advisers at other firms, hinting that if they move quickly they could jump ahead of a rule requiring them to disclose their signing bonuses to their clients.

The so-called disclosure rule, from the brokerage industry's self-regulator, the Financial Industry Regulatory Authority, must be approved by the Securities and Exchange Commission. Ameriprise's letter suggested brokers move while "deals are still private."

Ameriprise is "looking to get advisers from some of the independents like LPL Financial Holdings and Raymond James Financial, but also the wirehouses," said Nigel Dally, managing director at Morgan Stanley. LPL and Raymond James typically have franchise-like arrangements with brokers who remain independently employed; the big so-called wirehouse firms tend to employ brokers as employees.

An Ameriprise spokesman declined to comment on the firm's recruiting efforts. Raymond James declined to comment about its recruitment efforts.

The offers are being made for hires to Ameriprise's advice and wealth management division, which consists of brokers in both the firm's independent and employee divisions, and serves clients with more than $1 million in investable assets.

"Since the crisis, firms are trying to work more with top producers because they are more profitable," said Alois Pirker, research director at Aite Group. "The hiring strategies are very much directed at the upper end, and Ameriprise seems to be in line with that." (Reporting By Elizabeth Dilts; editing by Linda Stern and Chizu Nomiyama)

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