According to a survey of advisors employed at independentbroker-dealers and insurance companies, 86 percent report thatbeing an independent registered investment advisor (RIA) isappealing.

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For those who have friends or colleagues working as RIAs,there’s an even stronger pull; among advisors working forindependent broker-dealers who know someone who started or joinedan RIA firm, 95 percent say they find the RIA model appealing.

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Jennifer Davis, a representative of Schwab Advisor Services, the company which conducted thesurvey, said that although the survey results overall weren’tsurprising, the high level of appeal was intriguing to the researchteam.

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“That number is significant,” she said. “It indicates that theRIA model has great appeal among advisors at IBDs [independentbroker-dealers].”

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The survey, conducted earlier this year, also found that most ofthe broker-dealer affiliated advisors feel independent in some way;56 percent reported feeling “somewhat independent” and 36 percentsaid they are “completely independent.

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Yet 81 percent recognize that their business would be differentif they made the switch to become a registered investment advisor.In fact, there was a 45 percent increase in the number of advisorteams transitioning to RIAs from broker-dealer firms in 2010compared to 2009.

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When asked about their interest in RIA firms, 43 percent ofbroker-dealer advisors cited greater ability to develop andgrow their own business, 42 percent said they’d be able todeliver more customized solutions, and 41 percent chose thecapacity to hand pick their own team.

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“Advisors with independent broker-dealers saw these as hugepotential benefits to joining or starting an RIA firm,” Davissaid.

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One of the major things holding advisors back from making theRIA transition is the economy; 45 percent say that a friendliereconomic and tax environment for small business owners wouldincrease the likelihood that they’d make the switch, while 43percent cited and overall improved marketing and economicenvironment.

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Additional survey findings include:

  • Fifty-eight percent of advisors would prefer to join anexisting firm, while 34 percent would prefer to start theirown.
  • Eighty-two percent of independent broker-dealer advisors’assets under management are currently in a fee-based model.Forty-five percent of advisors say their long-term plan is to bemostly or all fee-based, while 46 percent indicate they expect tomaintain a mix of both commission- and fee-based business. Only 8percent of advisors say their practice will be mostly or allcommission-based.
  • As cited by advisors, the two biggest advantages to a fee-basedmodel are providing an easier to understand pricing model forclients (62 percent) and having greater predictability in revenue(61 percent).

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