Boston, MA, May 21, 2009 – A new report from Aite Group, LLC analyzes the cases of more than 40 financial advisors who have gone independent in recent years. It examines the share of client assets these advisors were able to retain after breaking away from their previous employer, and identifies some of the primary factors that drive the level of breakaway assets.
A great migration of advisor talent and client assets is taking place in the wealth management industry, and many wire house firms are struggling to keep their coveted brokers from walking out the door. While lock-in contracts have helped retain top producers, many mid-range brokers will jump ship should the right opportunity arise. The resulting effect could be dramatic for leading brokerage firms, since employee brokers have proven themselves effective when it comes to retaining client assets when breaking away. On average, 62% of an employee broker's book of business will follow them to the new firm, and almost half of all employee brokers will retain more than 75% of client assets.
"Competitors of leading wire houses, as well as the independent broker/dealer and registered investment advisor channels, are set to benefit greatly from the current situation at firms like Merrill Lynch and Morgan Stanley Smith Barney," says Alois Pirker, senior analyst with Aite Group and author of this report. "The opportunity for the competition to significantly grow its business has never been better. Those firms competing with the leading wire houses that will be most effective in hiring breakaway brokers have the unique opportunity to change the competitive landscape of the wealth management space in a very short period of time."
This 23-page Impact Note contains 22 figures. Clients of Aite Group's Wealth Management service can download the report.