Every year, about 13,000 U.S. financial advisors—roughly 5% of total advisors—switch firms. Most seek independence for greater control, growth, and enhanced productivity through advanced, integrated tech solutions.
Advisors need a swift and seamless transition of client assets to protect their livelihoods. However, the “repapering process” has historically been complex and time-consuming. In this month’s newsletter, we explore the reasons behind these moves and offer insights on how advisors can successfully transition.
The following is an excerpt from this month’s newsletter:
The Driving Force
We asked our contributors to elaborate on what is driving advisors to move from the large wirehouses to independent RIAs and broker-dealers. The short answer? There are many reasons.
Grier Rubeling, Founder of Advisor Transition Services, says some advisors “have a desire to be proactive about their due diligence and future planning. Others are being reactive and responding to changes that their current firms are making, whether it be the introduction of more restrictive employment contracts, the push to sell proprietary products, the exiting of the broker protocol, or a change in firm initiatives or leadership. The upside potential in the fee-based market is attractive. Not only are advisors free to make decisions in the best interest of their clients, they’re free to do so for their own businesses as well.”
What else is driving advisors to take the leap? According to Ryan Shanks, Chief Growth Officer for Apollon Wealth Management, advisors are thinking about three things.
“First, there is the financial impact of a move—which almost always generates an increase in their income. Next, there is the ability to grow their business with like-minded resources, where collaboration becomes a key driver of growth. And, finally, there is control, which allows them to build their own wealth management firm or to join one that is doing business the way they would if they were running their own company. The greatest reward for an advisor leaving a wirehouse is gaining control and doing what they believe is in the best interests of their clients.”
Jeff Schwantz, Chief Revenue Officer at Advisor360°, voiced a similar sentiment, saying, “the shift to RIAs and other independent models represents a journey towards professional autonomy, financial growth, and the opportunity to deliver exceptional client service.”
Explore our newsletter for in-depth insights and strategies on why financial advisors are moving to independence and how to ensure a successful transition.
