Some of the wirehouses’ most-coveted advisors have caught the industry’s attention by making the leap to independence over the last few years, causing many to question the wirehouse model. After all, RIAs are expected to grow faster than wirehouse advisors this year, increasing their client base by 12 percent versus 7 percent for wirehouse FAs, according to Aite Group. Last year, RIA firms’ assets grew by 18 percent, versus wirehouse firms by 8.2 percent.
But are the wirehouses really withering, as independent advocates say they are? Wirehouses still have an impressive 37 percent of asset market share, and most advisors who move out of a wirehouse stay within the channel and grow as fast, if not faster, than their independent counterparts.
We’ve seen advisors break away from wirehouses and experience explosive growth as independents because they are no longer limited in terms of the products they can access, and the marketing they can do. But we’ve also watched advisors leave the independent space for a wirehouse, where they grow faster due to the “all-in-one-place” ease of doing business and access to more robust support. All of these advisors who moved had the end goal of superior growth but had challenges and frustrations limiting them.
The key question that advisors need to answer for themselves is not, “Where will I grow faster?” but rather, “What impact are my frustrations having on my ability to serve my clients and grow my business?”
