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Survey flags high percentage of 'break-away advisors'

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Last June, NU reported that more than three-quarters of high net worth investors planned to leave their current financial advisor and that only 2 percent would refer their advisor to other affluent investors.

The low approval rate may have something to do with dissatisfaction among investment advisors themselves. A new survey finds that nearly one in four advisors (23 percent) is at-risk of leaving his or her firm.

These and other findings are included in the “Advisor Channel Migration Trends 2013 Cogent Reports” study from Market Strategies International. The survey polled 1,749 financial advisors and 396 potential “breakaway advisors,” including broker-dealer registered representatives who are likely to move to a new firm in the next 24 months.

National wirehouse advisors at-risk of defection represent the most attractive targets with average assets of $123 million compared to $81 million among potential “breakaway” brokers overall, the survey indicates.

When asked about potential new employers, LPL and Raymond James earn the highest consideration for the second year in a row with 49 percent and 44 percent likely to consider each firm, respectively. Rounding out the top likely broker/dealer destinations in the survey are Wells Fargo Advisors, UBS and Commonwealth Financial Network.

Respecting factors motivating advisors to change firms, earning potential remains paramount. However, reflecting misgivings related to their own firm’s model portfolios and the inability to have complete access to preferred products, access to a better array of investment solutions for clients was mentioned more frequently this year, particularly among wirehouse advisors. Meanwhile, LPL and Raymond James both earn strong consideration among advisors seeking to improve the client experience.

“LPL and Raymond James appear most successful in emphasizing the characteristics that matter most to advisors considering a move including independent platforms, a destination for greater independence, and superior operational support, says Meredith Lloyd Rice, senior product director and author of the report. “Evolving advisor needs, including greater reliance on fee-based compensation, suggest that firms will need to work harder to adapt in order to attract and retain top producers.”


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