Are wirehouse brokerage firms doomed? Let's just say they are finding it hard to hang on to their top brokers. We've noted before that top producers are continuing to be recruited by independents, and despite some rules that make it hard to switch, more top producers are doing so.

This is bad news for the likes of Morgan Stanley Smith Barney and Bank of America Merrill Lynch. One Smith Barney broker recently left and told Bloomberg on his way out: "Smith Barney had a very hands-off environment, like you knew what was best for your clients. With Morgan Stanley, it just became an unfriendly place. Smith Barney is dying a slow death. It's all about Morgan Stanley."

The proof is in the numbers. More than 7,300 brokers left Morgan Stanley Smith Barney, Merrill Lynch, Wells Fargo Advisors and UBS Wealth Management Americas over the 18 months through June 2010, according to the Aite Group. Assets under management at these brokerages dropped 16 percent to from 2007 to 2009. That coincided with a rise of nearly 14 percent at independent firms, led by Charles Schwab.

Such numbers in and of themselves aren't earth shattering. But wealth management was supposed to be a strong point for the likes of Bank of America and Morgan Stanley. It's not turning out that way, especially as wirehouses find it harder to offer financial lures to bring in rainmakers. They are being forced to pay less upfront recruitment cash and attach more conditions to other incentives, notes Research Advisor.

For more:
- here's the Bloomberg article
- here's the Research Advisor article

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