This year, most of them call Morgan Stanley the darling of the Street. They predict that brokers will rebel against mergers. They wonder when management will wake up to the potential of female brokers. And they say the money for advisors to jump has never been greater. These are just some opinions from the industry's top external recruiters that were voiced at On Wall Street's eighth annual forum in New York. These 12 panelists, who came from as far away as California and Florida, all have ears inside the major firms. Here's what they are saying--both good and bad--about the business.

WHO THE PARTICIPANTS ARE: Carri Degenhardt-Burke, Degenhardt Consulting, Jersey City, N.J. • Mindy Diamond, Diamond Consultants, Chester, N.J. • Nicholas Ferber, Sanford Barrows Group, Hollywood, Fla. • George Jones, George Jones & Associates, New York • Michael King, Michael King Associates, New York • Rick Peterson, Rick Peterson & Associates, Houston • Steve Rosen, Rainmaker Associates, New York • Danny Sarch, Leitner Sarch Consultants, White Plains, N.Y. • Rich Schwarzkopf, Schwarzkopf Recruiting Services, New York • Andy Tasnady, Tasnady & Associates, Port Washington, N.Y. • Mickey Wasserman, Michael Wasserman & Associates, Agoura Hills, Calif. • Bill Willis, Willis Consulting, Palos Verdes Estates, Calif.

Deep Impacts

ON WALL STREET: First, I'd like to hear what you think constitutes the biggest story in the retail brokerage industry in 2006.

MICHAEL KING: Morgan Stanley. The turnaround is a remarkable change. It's amazing how brokers are responding to it, as opposed to the past when nobody was interested in going there.

DANNY SARCH: The story is the war for talent. Firms are not training as much. Some of the bigger brokers are getting older. Some of the best, well-known managers are getting older, and there aren't enough people to replace them. We're all fighting over the same pool. That, overall, is the story.

MICKEY WASSERMAN: Part of that story is the numbers that are being thrown out there. The deals are unbelievably high right now. I don't see a stop coming. The big story of 2006 is what the major firms are paying FAs to come over.

BILL WILLIS: The deals are like we've never seen before--enormous. And the performance that brokers are having for their clients is pretty good. So they feel confident they're going to bring a book of business, because over the last 12 to 24 months, people are making money with them. So loyalty's a bit higher among clients.

MINDY DIAMOND: It's been a perfect storm this year for recruiting. The Morgan comeback has been extraordinary. Morgan this year has given brokers a good reason to move. And--combined with enormous deals and real competition for talent--it becomes a great time for big producers who have a lot in fee-based, are clean and have portable books of business to move. But it's getting tougher for the [$200,000, $300,000 or] $400,000 guy to find a home.

STEVE ROSEN: The perfect storm generates from the fact that there's no more organic growth. Years ago, the firms used to grow by bringing on young studs and training them, and hard work and talent would bring in business. That's no longer the case. It's more about bringing in seasoned people with connections. It's more about who you know than how hard you work these days.

ANDY TASNADY: A different story, I would say, is the increase in expectations by both clients and financial advisors. There are more alternatives for both clients and FAs to choose where they want to conduct business. It's increasing the pressure for firms and FAs to actually provide better service and value. You'll see this continue--where FAs that are providing better value will succeed even [more than] they have in the past. And firms that provide FAs with the services, products and compensation structure to succeed will do better. Those [FAs and firms] that do not provide that service will continue to do worse.

Marvelous Morgan

ON WALL STREET: Mindy, you said Morgan's story is extraordinary. Tell us what is extraordinary about it.

MINDY DIAMOND: The thing that makes it extraordinary is how far they've come. You've got John Mack and James Gorman running the show. They've brought over enormous talent. They came out with a new compensation plan that has been very well-received amongst the brokers at Morgan, as well as potential recruits. It was an uptick for producers over $300,000; there is a small penalty for discounting and minimum households. The message they're sending is "we're a firm of productivity and want to be the firm of choice for large producers." The bloodbath of brokers leaving them has stopped. Instead of the debacle of Wall Street, it's been the darling of Wall Street. And they're very creative on customized deals--doing what it takes to get a deal done.