"With the movements and the consolidations that have occurred in the wirehouses and the Bear Stearns and the WaMus and the Merrills, that uncertainty has really trickled down to the individual client," Young says. "One new client said 'I wasn't expecting a lot [from the previous advisor], but I thought they could have at least shown some TLC.'"

In fact, some independent advisors voice amazement at how giant brokerages left their clients hanging with virtually no communication. "A lot of advisors made the mistake of just freezing in the face of the bear and not communicating with their clients," Sanders says. And even if they were, he says, they were not communicating effectively. "That was the result of just constantly having the strategy of buy and hold only."

Robert Fragasso, president of Fragasso Financial Advisors, says his firm has also been picking up new clients with educational seminars, aggressive advertising and his employees' high profiles in the firm's hometown of Pittsburgh. He says his clients aren't just coming because the brokerages and wirehouses are shedding clients left and right. Money is also coming in from reformed do-it-yourself investors, whose undiversified strategies during the crash brought them plummeting to Earth with melted wings.

"Investors mistake the bull market for their own brilliance; in bear markets, they realize the flaws in their methodology," says Fragasso. In other words, he says, there were many investors who were chasing hot stocks, they weren't balanced, and the cracks in their methodology ruptured into giant fault lines when the financial system collapsed. He notes that some 50 new potential clients beat down his door in November and December, a huge increase over the three or four prospects that usually darken the threshold every month.

Barry Taylor, a portfolio manager at Bingham, Osborn & Scarborough LLC, says that his firm has also seen an influx of new assets. Yet he thinks the really big surge has yet to come, because many people have simply sidelined their money, stockpiling them in cash at firms like Fidelity and Schwab, where they are waiting to go back into the market when skies turn blue again.

Why Your Firm?
It's not any one type of firm that's picking up assets. It could be that clients want to be nestled in the bosom of something like, say, a stalwart local accounting concern. Alan Goldfarb works at just such a place-Weaver Tidwell Wealth Management in Dallas, the wealth management arm of the half-century-old Texas independent accounting outfit Weaver and Tidwell LLP. Goldfarb's unit has snared 49 new clients in the last six months-without an advertising campaign.

The wealth management unit joined Weaver Tidwell only a few years ago, in 2001, and originally the accounting culture there didn't know what to make of his team. But they've warmed up, he says, and now they are sending more of their accounting clients to the wealth managers in their midst because they realized the wealth management arm had a place in helping them develop client relationships. When these accountants started asking clients the question: "Are you happy with your financial advice," it turned out many of them weren't. And these people jumped at the chance to meet with the firm's financial advisory arm in the last year and get a second opinion when their portfolios started to turn sour.

"That's where about half of the 50 came from," says Goldfarb, referring to the in-house referrals. "The other half came from direct relationships with attorneys and other people we knew. In other words, we didn't do a mail solicitation or anything."

Other firms are benefiting from their accounting relationships as well, especially around tax time. Meanwhile, firms like Schwab and Fidelity have set up advisor referral programs which send clients to independent advisors who need more sophisticated advice.

"Clients have been building retail assets at these firms because of people coming in and opening accounts," Taylor says. "People are basically closing their accounts with their brokers and parking it. I've had some referrals from Fidelity where they feel that people need to do more than just park their cash. So we'll get a referral [at Bingham Osborn] to approach it more from a planning standpoint, because our services are broader than what you'd get at Fidelity. They are not as likely to be offering planning to higher-net-worth individuals."

New Firms, New Investment Philosophies
Who says it is a bad time to start an advisory firm? One beneficiary of Fidelity's program is King Lip, a portfolio manager who last year bolted giant Bingham Osborn to rejoin an old Credit Suisse colleague, Simon Baker, at his independent firm Baker Avenue Asset Management. The advisory has accumulated $70 million in new assets since March of 2008, Lip says, and is flourishing because of an aggressive strategy that dictates they go to cash in down markets as a defensive measure.