There have not been very many advisors looking to grow their business in the independent channel recently. Many advisors in the independent world are focused on succession planning and coming up short with whom they choose to run their business when they retire.
According to Alois Parker from Aite Group (it looks at the biggest challenges for brokers wanting to break away: technology, compliance and administration),
“The hardest part is to leave a captive environment where a lot is taken care of for the advisor and then the advisor has to learn to stay compliant, which is difficult because the way to do so has been redefined over the last five years and more regulations are coming down the pike.”
Fortunately for the independent channels, there are new technology platforms that are becoming available to help advisors start growing their business. Also, even with the challenges independent advisors face, they still wouldn’t leave. According to Independent Channel Needs Newcomers, Ruthie Ackerman states,
“…87% of independents recommend going independent, which means that as challenging as the process is, the benefits outweigh the difficulties.”
The reason newer advisor don’t start out in the independent channel is because it is much easier to build a book with a wirehouse first, then go independent. Ruthie Ackerman states,
“…wirehouse brokers that breakaway are more successful than their peers who started out at independent firms. Those from wirehouses are more likely to retain their clients when going independent, with 50% retaining three-quarters of their assets…”