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October 28, 2011 at 09:35 AM
Although there is disagreement in the industry about how prevalent the trend is toward breakaway brokers—those leaving behind wirehouses to seek out independence and perhaps more stability in an uncertain regulatory environment—TD Ameritrade says that its own numbers are up, with a record number coming to TD Ameritrade Institutional in 2011. What’s bringing them? Investor demand, according to the company; clients are looking for objective advice, and brokers are following them.
Chip Roame, head of Tiburon Strategic Advisors, said recently that he didn’t “buy it” that the number of breakaways moving to independence is growing. Rather, said Roame, the majority of the 12% of advisors leaving wirehouses—90%—do so because they are losing their jobs. Of the remaining advisors who move, says Roame, 70% remain in the wirehouse and regional channel.
However many there are, a recent study by TD Ameritrade Institutional showed that those who do go independent are driven by clients who increasingly choose to work with RIAs. In a statement, Tom Nally, managing director, institutional sales, TD Ameritrade Institutional, said, “… the top reason investors choose to work with an RIA is that, as fiduciaries, RIAs are required to offer advice that is in the best interest of their clients. The survey results support what we see as a long-term trend of investors seeking objective advice. Brokers recognize the movement and are following investors to the independent RIA channel.”
