A new Charles Schwab survey of advisors at major financial firms finds that nearly six out of ten respondents (59 percent) say the idea of being an independent investment advisor appeals to them, according to Schwab. And close to half of survey respondents indicate that they would actually consider a move to independence.
Some 200 financial advisors participated in the survey, conducted by Koski Research from October 7, 2009, to October 13, 2009. Those surveyed work at about 15 major full-service firms, and 52 percent have more than 10 years of investment advisory experience. The median assets under management is $84 million.
The surveyed advisors are also confident about the strength of their client relationships, with 80 percent saying that they feel their clients are more loyal to them than to their firm.
“The success of independent investment advisors has not gone unnoticed by the industry at large, and there are now more individuals and teams who are investigating whether the independent model is right for them,” explains Barnaby Grist, senior managing director of Schwab Advisor Services, a leading provider of custodial operational and trading support for approximately 6,000 registered investment advisors (RIAs).
As of end of September 2009, 126 teams have moved to an independent model with Schwab, the company says. This is an increase from 123 teams in all of 2008.
Not all advisors who are interested in independence want to start their own businesses from the ground up, as more than half of the advisors surveyed (56%) say they would rather join an existing RIA than start their own firm.
“Plugging into an existing firm is an increasingly popular choice, and more RIA firms are building business models and technology platforms that allow this to take place,” says Grist. “As a result, independence has become a viable option for a greater number of advisors.”