Wirehouse advisors switching to independent firms or who become Registered Investment Advisors (RIAs) don’t need to worry about losing clients: We find that clients follow at the same rate — whether advisors take the road less traveled or stick to the wirehouse and regional firm world.
That’s because the differences in product offerings among traditional wirehouse brokerage and independents are narrowing as both vie for quality advisors. For the most part, advisors can assume they can transfer clients in various products from one firm to another fairly smoothly.
Most independents offer standard products, like SMAs, UMAs, mutual funds, stocks, and bonds. But platforms in independent channels, which pride themselves on their open architecture, can be more flexible than traditional wirehouse ones.
Advisors are less likely to need to battle the firm’s manager research group to place money with out-of-the-box managers. They charge clients retainers for financial planning and keep most or even all of the fee.
Advisors switching to the fee-only RIA model, and who give up their Series 7 licenses, will need to offer clients load-waived shares of mutual funds and annuities. Most mutual fund companies have no-load equivalents, and annuity firms are developing them.
It is advantageous if the prospective firm has a dedicated transition team – most major players do. Wirehouse advisors who make the transition with the help of a dedicated group report high levels of satisfaction.