Cerulli: Nearly Half of Insurance Professionals Express Preference for Independent B-D Channel

Though most advisors in other channels (bank, wirehouse and regional broker-dealer) prefer to market their services through their current channel, the independent broker-dealer channel consistently ranks second as a destination of choice for these advisors as well. The Cerulli report finds that 16%, 12% and 13%, respectively, of advisors in the bank, wirehouse and regional channels flag independent broker-dealer as the channel of choice behind their current channel.

Accounting for the popularity of the independent B/D channel, the report says, are “the lures of increased payouts, broad market options, and greater flexibility to run their business as they see fit.”

The report notes, however, that independent B/Ds operate on tighter profit margins that those in other channels. Most independent B/Ds report margins in the single digits with the goal of getting to 10%. This compares with margins of 10% with the hope of getting to 20% among advisors employed by wealth management arms of wirehouses.