A survey of some 2,500 traditional employee advisors found that more than 70% are considering a move to independence, Diamond Consultants, a recruiting and consulting firm, said Tuesday. Still, experts say, just 10% at most will actually make the move.
“Financial advisors are becoming increasingly attuned to the growing number of high-quality independent practice models,” explained Diamond Consultants president and CEO Mindy Diamond (left), in an interview with AdvisorOne.
That said, Diamond explained, many of the 70% will not go independent “when they really see what it is about and what it is not about: It is not about upfront money, big upfront money, and there’s no cachet of a big brand-name firm.”
According to the study, conducted by Diamond Consultants in the first quarter, advisors want to have greater control over their businesses and the ability to be a buy-side advocate for clients. In addition, advisors are seeking less bureaucracy, a more client-focused culture, greater freedom and flexibility, and the desire to build equity in an enterprise.
“There are now options for advisors who want to go independent through a custodian, plug into an existing independent, use a platform firm for a turnkey solution, or almost anything in between,” Diamond said. “The possibilities are extensive and exciting.”
Diamond Consultants has placed four teams with a combined $2.5 billion in client assets with independent firms so far this year.