Businessman leaping down stairs

Historically, financial advisors have admired the wirehouse model, in part because of the reputation and credibility those advisors could leverage with new and existing clients. The major wirehouses — Morgan Stanley, UBS Wealth Management, Merrill Lynch and Wells Fargo — stood tall as household names, and affiliation with those brands could give advisors a competitive leg up.

However, due partly because of an avalanche of bad press, from institutional failures in 2008 through recent cringeworthy headlines, more and more financial advisors are leaving the wirehouse world to become RIAs. Wirehouse brokers used to benefit greatly from a branding standpoint by being affiliated with those firms, but negative public exposure in some cases has made it lose its luster — even become somewhat of a liability.

This makes the RIA channel more attractive than ever — advisors can build their own brands free from the perceived baggage that has come to be associated with some of the wirehouse affiliations.

A Decade of Disastrous Exposure

The onslaught of negative press was first unleashed in September 2008 and has continued tarnishing many wirehouse brands and subsequently their advisors. We all remember the damning headlines of fraud and corruption during the financial crisis of 2008 and the years following. In 2012, Barclays and UBS were mired in a massive Libor manipulation scandal. Most recently, in 2016, Wells Fargo’s reputation tanked with reports the mega-bank created millions of unauthorized bank and credit card accounts without their customers ‘ knowledge. The list goes on.

The CFA Institute’s Crisis of Culture Report found that 53% of 382 senior financial services respondents “think that career progression at their firm would be difficult without being flexible on ethical standards.” Pair that type of culture with unrelenting press scrutiny, and you have a recipe for recurring public relations nightmares. Consequently, a recent Bloomberg National Poll found that 69% of Americans distrust Wall Street executives.

Neutralized Brand Advantages

The bulk of the wirehouse branding advantages have been relatively diminished by the disadvantages of constant negative news coverage. Many RIAs work hard to distinguish themselves from the wirehouses now, even making it a core aspect of their branding and messaging.

The media climate has helped to produce an environment ripe for wirehouse advisors to go independent. Over the past 5 years, there’s been a significant uptick in wirehouse financial advisors leaving for smaller regional and independent firms. With that said, contemplating RIAs still often ask the following questions:

  • How will I retain my clients?
  • How can I offer my clients the same amount of credibility as previously enjoyed by wirehouses?
  • How do I build my own reputable brand?
  • How will I get the support I need?

Forming an independent identity

Today, an increasing number of advisors feel benefits of going the RIA route, from a reputational standpoint, are more compelling than the risks. Independence provides ownership over the brand, messaging, marketing systems and overall identity. It makes it easier for advisors to niche out or adapt to a local or regional client base.

Furthermore, breakaway advisors don’t need to be expert marketers to successfully build a new brand. There are platforms and consultancies available who specialize in RIA branding throughout the transition process, allowing advisors to focus on their vision while experts tackle details ranging from fonts and logos to website design, copy and core messaging.

Blogging, podcasting and video streaming are just a few low-cost ways RIAs can emerge as thought leaders, building influence and visibility for their new brands. Others establish credibility with public relations, either through internal efforts or by hiring an agency, in turn generating positive press and recognition and distinguishing themselves from the aforementioned wirehouse public relations issues.

As the independent movement roars on, potential breakaways can check branding off of their list of concerns. With proper guidance and a clear vision, they can escape wirehouse headline woes and create an independent identity that truly reflects their culture, values and client commitment.


Shad Besikof is president and COO of TruClarity, a comprehensive turnkey solution for financial advisor independence and life beyond the leap.