Charles Schwab (SCHW), which is big on surveys, just released the results of a brand new one:
“The success of independent investment advisors has not gone unnoticed by the industry at large, and there are now more individuals and teams who are investigating whether the independent model is right for them,” said Barnaby Grist, senior managing director with Schwab Advisor Services, a leading provider of custodial, operational and trading support for approximately 6,000 registered investment advisors (RIAs).
Grist also noted that not all advisors who are interested in independence want to start their own businesses from the ground up. This is echoed in the survey findings, as more than half of the advisors participating in the survey (56%) say they would rather join an existing RIA than start their own firm.
Schwab also said that “as of the end of September 2009, 126 teams have moved to an independent model with Schwab this year.” This is up from 123 in all of 2008.
I don’t think any of this news is surprising. A lot of financial advisors from the likes of Merrill Lynch, which is now part of Bank of America (BAC), Morgan Stanley (MS), and other major wirehouse firms are jumping to independent platforms like Schab’s and TD Ameritrade’s (AMTD).
Big firm names used to be helpful in landing clients, but those days are over. Given Wall Street’s role in creating the housing bubble and the size of the bank bailouts, lots of folks on main street don’t trust major firms. Plus, many advisors are unhappy with their employment situations post-merger.
These conditions have created a fantastic recruiting environment for discount brokers with independent financial advisor platforms. There’s just never been a better time to recruit.