Despite solid stock market gains and heavy investments in technology by broker-dealers, a good number of advisors seriously consider moving to independence and becoming RIAs, according to the latest TD Ameritrade Institutional survey.
“There is an undercurrent of discontent as disenchanted brokers navigate the second half of their careers,” said Scott Collins, director of brokerage independence for TD Ameritrade Institutional, in a statement.
“Midcareer breakaways have enough tenure to realize that they have options, and that the independent RIA path can offer a better way to serve clients and advance their careers,” Collins explained.
The most recent TD Ameritrade poll gauged the sentiments of 134 brokers who plan to go independent within the next three years. The survey work was done in September in cooperation with Market Strategies International.
On average, these advisors worked with $274 million in client assets, have been with their current firm for 12 years and in the industry for 18. Their average age is 46.
Nearly half of breakaways surveyed expect the brokerage industry to deteriorate significantly in 2018.
But what is it that is pushing them out of their current firms and into the independent space?
Read on to see the main factors driving today’s brokers to break away:
Close to 50% of breakaway advisors surveyed believe that conditions in the brokerage industry should deteriorate significantly in 2018.
These registered reps point to the regulatory environment as the industry’s biggest hurdle, followed by changing compensation structures and reputational issues.
When responding to further questions, more than half of breakaway brokers polled express their dissatisfaction with their employers due to several factors, such as corporate culture, leadership, career opportunities and compensation, TD Ameritrade’s latest survey finds.
For instance, just 16% of those surveyed say they are satisfied with their firm’s corporate cultures vs. 55% who are unsatisfied.
In terms of advisor compensation, only one-fifth are satisfied, while more than one-half are unsatisfied with their pay.
Overall, the TD Ameritrade poll reveals that the average level of satisfaction with the breakaway brokers’ current employers is only 12%.
Fewer than 30% of these reps say that their ability to offer superior service to clients at their present advisory firms is satisfactory, for instance.
Plus, less than 20% of those surveyed believe they have satisfactory career tracks and opportunity for advancement with their current firms.