In the end, Andreas Hess could no longer play the guessing game. Day after day, the Philadelphia-based advisor went to work at Wachovia Securities wondering what the acquisition of his firm by Wells Fargo would mean for his future. With communication from upper management "poor at best," he and his colleagues could only guess. "The morale was the lowest I've seen at any job throughout my working career," he says. "It felt like Sept. 11 all over again-not knowing what was going to happen or where to turn."

Hess and his branch-based colleagues had no idea who was working for whom and how-or even if-they would fit into the new system. One colleague refers to that time as "uncertainty without end." In February, after eight years with Wachovia, Hess finally threw in the towel and signed on with a nearby community bank, National Penn Bank.

SEISMIC SHIFTS

The past year has been grueling for advisors at the country's biggest banks and brokerages. In addition to suffering substantial losses in their own portfolios, reps have had to deal with blaring headlines about their parent companies' monumental failings, plus field countless client questions about the bad news and the market meltdown. Perhaps toughest of all, advisors have to deal with the uncertainty of where they stand in the midst of tectonic tremors as the very industry consolidates around them. "It's the perfect storm," says Kenneth Kehrer, director of research at Kehrer-LIMRA.

For some, the tumult is opening exciting new possibilities: Wirehouse brokers are taking hefty bonuses to jump to rival firms, and some bank-based brokers are joining high-end organizations with sophisticated platforms and wealthy clients. Others are happily joining smaller banks, where the leads are plentiful and a modest book of business is welcomed with open arms.

But for many working at the bigger organizations these days have been painful and disorienting. Consolidation is squeezing out all but the top-performing brokers, and reps worry that their work culture will be obliterated. Many advisors are still twisting in the wind, not knowing how their job will change or whether they will even have one. A former Morgan Stanley executive, who wished to remain anonymous, recently said Merrill Lynch brokers had told her that they were busy placing bets on who would get let go next. "You can't imagine there's a lot of creative solutions for clients going on in that environment," she says.

All this uncertainty is manifested in the sheer amount of movement among advisors-and clients. For example, in April, Citigroup reported that its global wealth management division had suffered a net loss of 2,582 financial advisors over the past year. And clients pulled $40 billion in assets during the first quarter of 2009, partly because of fleeing advisors. Both Morgan Stanley Smith Barney and Merrill Lynch shed about 2,000 advisors.

A large part of the turnover is a result of the biggest institutions skimming the best-performing advisors and dumping the rest, observes one West Coast wholesaler for a mutual fund company. Advisors who are "above the line" have gotten or expect retention packages, he says, while those with annual production below $450,000 or so have also seen their payouts halved. "If you're below that line, they're really forcing you to make a business decision," the wholesaler says.

Seven months ago, a Smith Barney rep in the Midwest who didn't want to be named, was furious when he was called on to make such a decision. In December, "they pretty much said the veteran people producing no more than $400,000 or $500,000 on a regular basis should look for a new home," he says. He recently decamped to a small bank's brokerage program.

THE AGONY AND EMPATHY

Even where brokers have stayed, they are so mired in helping investors get their footing after the market crash that they have lost a bundle in new sales. Average production for bank-based advisors is normally $20,000 per month, says Kehrer. In November, that average dipped to $14,000. It has since risen, but has been stuck in the $17,000 range, he says. "When you talk to their managers, they say the dip is largely due to the fact that they are serving customers rather than selling."

Many of those fleeing grew tired of addressing client concerns about their parent companies as damning headlines about TARP payments pummelled the biggest banks. "Citibank was an unending waterfall of negative news," says John Bacialli, a former Smith Barney advisor. "My clients and I would spend more time talking about what was going on at Citi than what we should have been talking about, which is their investments."