After a lull in growth last year, RIA firms are now leaving wirehouses at a faster rate, said Charles Schwab chief executive Walt Bettinger in a call Friday with analysts discussing the company’s financial results, released earlier this week.
RIA firms brought in near-record net new assets of $49.5 billion in the first half, a 77 percent year-over-year increase. For the second quarter, RIAs affiliating with Schwab added $24.6 billion in net new assets, up 108 percent from a year ago.
A contributing factor “is the break away of more brokers of size,” Bettinger said. “You’re starting to see some fairly large teams from a variety of different firms move to an independent model.”
The DOL fiduciary rule has contributed to that trend, Bettinger said, encouraging more broker teams to shift to a fee-based model where they are “then finding the path … to independence being a much easier hurdle.”
Including its retail business, Schwab gathered $46.2 billion in net new assets during the second quarter, a record for the period and the second-highest quarter ever. Year-to-date net new assets of $85.1 billion were also a record. (Those figures omit a $18.3 billion inflow from a mutual fund clearing client.)
Bettinger said the sizable second-quarter inflows were unusual for a period when many clients dip into their accounts to pay taxes. Net flows are a key metric for brokerage firms.
Breakaway Brokers Leaving Wirehouses Accelerate, Schwab's Bettinger Says
July 21, 2017
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