Following a rush of hiring activity in the wirehouse world over the past few months, deals have finally tumbled and the race to recruit has slowed, according to industry headhunters.

The only wirehouse bucking this trend is Smith Barney, which sources stay is still offering a competitive 240% of trailing-12 production all-in deal, with around 120% upfront.

Some recruiters say Smith Barney is desperately trying to boost its ranks after reportedly losing 500 brokers in the midst of the recruiting boom between January and March. “I think they’ve lost a lot of face with their new owner. Morgan Stanley is looking at them and wondering what is going on,” says a recruiter based in the Southwest.

He adds that some Smith Barney regional and branch mangers don’t feel secure in their jobs as the joint venture is finalized so they are trying to boost their recruiting numbers to impress their new bosses.

Smith Barney’s latest recruits include a $3 million team from Wachovia in Plano, Texas. Robert L. Mitchell, David Meadors and Michael Goodman oversaw $252 million in client assets and moved to Smith Barney on April 3.

Morgan Stanley, meanwhile, has seemingly pulled back its recruiting efforts, now offering a 220% maximum deal with 100% upfront. Recruiters say the firm is also becoming more choosy about who it recruits. “They only want tier-one brokers. They’ve got a good portion of them and most of the others have already moved or are on retention packages,” says one industry recruiter.

After offering the biggest deals on the Street (260% of T-12) at the end of last year, UBS has also lowered its deal to around the same level as Morgan Stanley. One recruiter says that firms are feeling the pinch after paying out big upfront recruitment deals and then seeing the market tank and the recruits’ production along with it. “Revenues went down and firms didn’t feel like they got value for money,” he says.