Ameriprise sweetens broker signing bonuses in effort to catch up on top recruiting

NEW YORK Thu Jun 12, 2014 4:19pm EDT

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NEW YORK (Reuters) - Independent brokerage firm Ameriprise Financial has ramped up efforts to recruit top financial advisers by matching the signing bonuses offered by the biggest brokerage firms in the United States, industry sources said. The strategy, coming as its efforts to recruit high end brokers have lagged competitors, was announced on a call with analysts and recruiters in the last two weeks, sources who were on the call said.

Ameriprise declined to comment on the move.

The move raises signing bonuses to 150 percent of an adviser's last 12 months of revenue, from 120 percent, for those that produced $830,000 or more. It would also offer signing bonuses of 150 percent for so-called "second quintile" brokers who produced in $585,000 in revenue, the sources said.

Since Oct. 31, Ameriprise has attracted 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 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.

Ameriprise spokesman Chris Reese said that the firm had recruited some 77 advisers in the first quarter of 2014, although the vast majority manage less than the $100 million run by top-tier brokers.

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.

Nigel Dally, managing director at Morgan Stanley, said

Ameriprise is "looking to get advisers from some of the independents like LPL Financial Holdings and Raymond James Financial, but also the wirehouses."

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.

Alois Pirker, research director at Aite Group, said top producers are most attractive to brokerages because they are more profitable. "The hiring strategies are very much directed at the upper end, and Ameriprise seems to be in line with that," Pirker said.

TIMING COULD BE A FACTOR

Bonuses are one part of the entire recruitment package, and Ameriprise did not immediately disclose other details, such as so called back-end points and what it will pay new hires who bring at least 80 percent of their client assets with them.

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

The rule from the brokerage industry's self-regulator, the Financial Industry Regulatory Authority, must be approved by the Securities and Exchange Commission. The timing for it to go into effect is not certain.

Ameriprise's letter suggested brokers move while "deals are still private."

Ameriprise Senior Vice President Manish Dave said the group has "the brand, the reputation and the resources to attract top-tier advisors and our ability to offer competitive compensation packages sets us apart from our peers."

The Ameriprise spokesman declined to comment further on the specifics of recruitment offers. Raymond James also declined to comment about its recruitment efforts.

(Reporting By Elizabeth Dilts; editing by Linda Stern, Chizu Nomiyama and Cynthia Osterman)

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