The number of advisors choosing to break away from their broker-dealer and IBD firms to set up their own shops grew 20% in 2017, according to a new report from Charles Schwab. The analysis, based on data from the Securities and Exchange Commission, shows that new RIA registrations reached 238 in 2017, up from 199 the previous year and capping a 59% jump since 2013.

Generally, only advisors who have at least $100 million in assets under management must register with the SEC. Advisors with fewer assets register with state securities authorities. In the latest Schwab report, 30% of the new independent RIAs managed assets of $300 million or more, up from 25% in 2016 and more than double the 12% in 2013. The average AUM for new RIA firms in 2017 was $352 million, up 28% from the average in 2016, and the total combined AUM of the 238 new firms was $84 billion.

Another characteristic of the newly registered RIA firms in 2017: 64% choose to use a single custodian while 29% choose multiple custodians. That’s similar to the breakdown in 2015 but up from 55% and 34%, respectively, in 2016.

Schwab is the sole custodian of 41% of the new RIA firms that use one custodian and is one of several custodians for 55% of new firms that use multiple custodians.

It’s not clear whether the trend of increasing breakaways will continue given that a number of BDs, including Morgan Stanley and UBS, have dropped out of the broker protocol, which has eased the way for advisors to go independent. The announcements of those decisions may have inspired some advisors to leave their firms before they officially left the protocol.

Morgan Stanley, for example, lost 47 advisors in the fourth quarter of 2017 — more than in any other quarter that year — which some attribute to the firm’s exit from the broker protocol that quarter.

John Beatty, senior vice president, sales and relationship management at Schwab Advisor Services, isn’t so sure that the rising trend of breakaways from broker-dealers and IBDs will slow.

“We continue to see firms and individual advisors pursuing independence,” he said. “Where there’s a will there’s a way… Non-protocol transitions have been a part of this movement over time.”

He recommends that any advisor looking to leave his or her firm review their employment contracts first, whether the firm participates in the protocol or not.

Reach Bernice Napach at bnapach@alm.com.