Advisors who work with high-net-worth clients are looking like the favored channel on Wall Street this year, but even so, their bonus pools look flat -- and could cause a wave of defections in a few months.
Johnson Associates sees overall compensation in the wirehouses plunging 20% to 30% this year as traders, managers, and investment bankers all suffer 20% or greater cuts in their incentive packages.
While advisors are one of the only categories to defy the trend -- bonuses may maybe climb 5% -- it isn't exactly an environment that inspires loyalty.
UBS, for one, risked a stampede of brokers when it looked likely that the firm's rogue trader losses would make it report a loss and pay no bonus at all.
As another year of retention incentives expires, many of these advisors are going to be more willing than normal to consider a big move.
That's an opportunity for independent firms that want to staff up on the best of the potential breakaways without cannibalizing each other.
It's also an opportunity to reach out to friends who might have gotten left behind in the wirehouse channel. A lot of reps are going to be in play next year.
Some of the others just need a little convincing in order to join them and reap the rewards of freedom for themselves.