A survey of some 2,500 traditional employee advisors found that more than 70 percent are considering a move to independence, Diamond Consultants, a recruiting and consulting firm, said Tuesday. Still, experts say, just 10 percent 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, in an interview with AdvisorOne.
Still, the decision is a tough one for traditional brokers, Diamond admits, mainly because of the short-term financial concerns. First, the advisors don’t get the upfront bonuses—as much as 200 percent of their trailing-12-month fees and commissions—associated with moving to another wirehouse. And, second, they may have to walk away from some deferred compensation, unamortized retention packages and other perks.
“I’m working with a super-entrepreneurial Merrill Lynch team that is committed to moving to independence,” Diamond said. “They were offered 200 percent by another wirehouse, which is, they’ve said, the last move they’d want to make. I don’t know the answer yet, but I bet they take it.”