It started as a trickle just after 2008 when as a whole wirehouse advisors became disenchanted with their firms and exceedingly mistrustful of the folks who ran them. Teams of advisors like The LLBH group, formerly of Merrill Lynch in Westport, CT and The Nick Bapis Group, formerly of Morgan Stanley, chose to forego the outsized transition checks being offered them from competitor organizations and go some version of independent with firms like Focus Financial Partners and HighTower Advisors, respectively. And, David Hou and Mark Sear, formerly of Merrill Lynch Private Banking & Investment Group, rocked the industry when they established Luminous Capital as their own RIA in 2008. As word spread that these top advisors were thriving in this new world and life at the major firms got more and more bureaucratic and less fun, the trickle has become more of a steady flow and almost every day we are watching another lifer wirehouse vet/corner office guy choose to cross the transom to independence. Who would have predicted a few years back that the breakaway broker movement would have such momentum and that, according to Cerulli,the “indie channel will control 38% of all assets by 2016?”
Now, as if all of a sudden, wirehouse leaders are beginning to catch on that a high net worth client can be well serviced outside of the wirehouse world, that the breakaway trend is not just a passing phase, and that spectacular models have been born that are viable landing pads for top advisors and their clients. The very folks who drank the Kool-Aid most at the big firms are wanting out and looking to join their advisor brethren as independent business owners and managers. Dan Sontag, “the ultimate wirehouse insider,” as RIA Biz reports, who has joined the Focus Financial Board of Directors as of this month, is proof of this. There is no greater imprimatur for independence than for a top advisor to see someone he respects greatly choose to plant his flag there and there is no question that Dan Sontag will be a lightning rod for important advisors who will say “wow, if it’s good enough for someone like him, it might just be good enough for me.”
