Breakaway Brokers

Breakaway brokers are changing the wealth management landscape.

This TowerGroup report examines the growing trend of financial advisors who leave large broker-dealers, where they are employees, and move to independent broker-dealers (IBDs) or registered investment advisors (RIAs). The financial crisis of 2008 and the resulting upheaval in the mainstream brokerage industry have intensified the breakaway trend.

Brokers are breaking away from large broker-dealers for four primary reasons: desire to gain greater control of their business, need for enhanced wealth potential, damage to the large firm business model, and restructuring of the brokerage business. Through the end of 2010, TowerGroup expects 7,500 to 9,000 advisors to go independent, representing $500 to $800 billion in client assets. Brokers are moving to independent broker-dealers (IBDs) and registered investment advisor (RIA) custodians, and both types of firms are poised to grow in the future.

Whether you’re a wirehouse broker thinking of going independent, an independent broker-dealer or RIA firm, or a service provider targeting this growing market, this information-packed report is a must-read.