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Being self-employed and having complete control of your business is not always as great as it seems. Some independent advisors find themselves limited on the different kinds of products and services they can offer their clients. Having your own business also involves dealing with compliance, human resources, and payroll. These extra tasks can keep advisors from their number one priority; their clients. These reasons are why wirehouses aren’t losing as many brokers as you may think.

According to Cerulli Associates, a Boston-based research firm,

“Wirehouses controlled 48.5% of investment assets as of 2007 (while) registered investment advisors plus dual registered channels, including fully independent firms and affiliates, came in at just 17.2%.”

Wirehouses are actively trying to retain their current amount of brokers and recruiting new advisors by providing retention bonuses and offering incentives such as an independent channel.

In Beating Back the Independents, Lauren Barack writes,

“A strategy that has proven fairly successful at retaining advisor-and one that comes straight from the enemy’s playbook-is to allow brokers to go semi-independent…While the primary recruiting ground for Wells Fargo Advisors Financial Network is outside of Wells Fargo, about 100 of its 855 financial advisors have moved from its private client group side to the independent channel.”

For the advisor who wants independence without all the extra costs and hassle, there are now hybrid firms that are aggressively recruiting talent. Barack writes,

“HighTower Advisors, a Chicago-based financial services firm, courts advisors that haven’t made the move to go independent yet, and do want the ability to have some ownership. Each advisor that joins the firm is a W-2 employee-like a wirehouse broker-but also becomes part owner of the company.”

The extra cost and hassle that comes with running your own independent shop significantly increases each year from insurance to compliance to human resources. It is encouraging to know there are still many options for advisors looking to make a move, from independent channels in wirehouses to hybrid firms.