An Exodus From the Wirehouses?

When I think about it, it reminds me of a liberation movement where people are gaining their freedom. Perhaps one of the biggest hoaxes is that the broker needs the company more than the company needs the broker. Truth is, if the broker is experienced, the company needs them much more.

After the end of my second presentation, during the question and answer portion, a broker came to the microphone and proceeded to tell me how he was proud of his 22 years as a broker and that my presentation made him feel inferior and that it was mediocre at best. Funny thing is, the room was jammed and they had to bring in extra chairs, just to accommodate the overflow. Afterwards, I had no less than 20 people tell me it was the best, or one of the best, presentations they had attended and encouraged me to forget about this upset broker.

Here’s where it gets really interesting. About 30 minutes later I learned that this same broker was rethinking his position, and as I understood it, was wondering if he should become an RIA. Many times we face a “bump” to our way of thinking.

I believe the RIA platform is, without question, a much more client-friendly and flexible platform than that of a wirehouse or bank. Many think the wirehouse model is dead and that it will be split into two components. One will be for commission-based brokers and the other will be for RIAs. Only time will tell, but as long as there are wirehouses and banks, there is great opportunity to capture market share. When clients receive a factual explanation of the differences, their decision is easy. If captive brokers had a clear understanding of the RIA model, I believe the exodus would be even greater.

What do you think?