October 1, 2019
Louis Diamond Quoted
By Ian Wenik
When asked, financial advisors who have fled the ranks of the wirehouses typically cite a handful of reasons for why they left the brokerage industry.
Some argue that they wanted to own their clients and equity in their business. For others, becoming an RIA stemmed from a desire to free themselves from their employer’s investment proposition and create their own portfolios.
Advisors’ employment agreements with large institutional-sized RIAs are arguably more restrictive than the contracts they may sign with brokerage firms, said Louis Diamond, an executive vice president at advisor recruiting and consulting firm Diamond Consultants.
‘It will have very strict non-solicits and non-competes, even more restrictive than the wirehouses,’ Diamond said of the typical RIA employment agreement. ‘They’re probably more likely to come after the advisors who leave than a wirehouse would be. In large part, it’s because the individual advisors really don’t own their own book of business.’