The recent stories about brokerage firms planning to recruit and train thousands of new advisors obscured the real underlying trend: Unlike last year's frenzied game of musical chairs, this time everyone is looking for just the right fit. The firms want the right advisors, and the advisors want the right situation for themselves and their clients.

Several recruiters agree that wirehouses have put some muscle behind hiring heavy hitters-as well as keeping the ones they have. And all the while, they also will be training rookies to fill out the ranks.

On the recruiting front, packages that looked too good to be true last year have increased in the past few months.

The trouble is, say some recruiters, not all financial advisors with strong experience under their belt, and therefore attractive recruits for a big firm, are interested in jumping ship. Many top advisors are locked into retention packages following the mergers and acquisitions in the industry last year. Add to this the fact that financial markets are still in some flux, and advisors aren't as eager to add any more volatility to their own lives-or to the lives of their clients.

"The [number of] people who want to look around has dropped because of the turmoil," says Bill Willis, president, chief executive officer and founder of Willis Consulting in Palos Verdes Estates, Calif.

The Rookie Revival

This reluctance of experienced advisors to move may be why the wirehouses are turning their attention once again to training talent in-house to offset what they're losing out the doors.

Indeed, trainee positions are up at Well Fargo Advisors, which is hiring 1,400 advisors to its flock this year, and Merrill Lynch, which has been recently reported as planning to add 2,000 advisors. Wells Fargo, which did not return a call for comment, has stated recently that it will be focusing "in particular on its training program," according to a spokesperson. (See onwallstreet.com, "Wells Fargo Looking to Add 1,400 Advisors").

And Merrill Lynch confirmed that its efforts will include revamping its 42-month trainee program. "We slowed down in the first quarter of 2009," says Mark Benson, managing director of the U.S. Advisory Practice Management Development Training Program at Merrill Lynch in Boston. "But in the second half of 2009 we started to increase those numbers. We have raised the number of trainee positions to a heightened level, and we will keep it there."

Merrill Lynch also will put more attention into a mentoring program. In fact, it plans to hire business consultants to advise the mentors in the hopes that their advice to new trainees will be more valuable.

Merrill Lynch's Benson says that 80% of the revenue the firm brings in comes directly from in-house trainees. And these fresher candidates come at a much lower price tag than a veteran advisor who may be dangling the hook to see what he lands.

To Willis, opening the doors again to younger people looking to break in, is a plus. "It's a sign of optimism," he says.

But it's not an easy road for trainee advisors. Andre Cappon, president of New York-based consulting firm CBM Group, says that in normal times, the survival rate of a trainee is about 15% to 20% after four years. "And if there is a good market, there are more survivors," he says. "And if it's a good firm, there are [even] more survivors."

But what about today's uncertainty? "It's a pretty rough time, and I think the survival rates will be less good," Cappon says. "You can improve the margins, but you can't do much to change the fundamentals."

Still, Cappon believes that wirehouses have little choice. They need to bring in more people, he says. And, they're probably not hiring enough, even with recent announcements that training programs are opening their doors to more recruits.

Attracting the Big Guns

Of course, while firms might be boosting their trainee programs with an eye to future growth, they're still looking for big, short-term pay-offs generated by attracting a top producer who can transfer his or her existing book of business.

Merrill's Benson says that the firm will continue to bring aboard veteran brokers as well as trainees. "We got to bring on new trainees, and we've also got to attract folks from the competition who are doing well," he says.

While recruiting has slowed a little, competition remains fierce and the deals remain large. Mindy Diamond, founder and president of Chester, N.J.-based Diamond Consultants, says she's seeing some firms offering 140% of an advisor's last year's book of business in cash upfront, plus five back-end payments over five years. That is up from an average of three back-end payments offered in 2009.