Advisors are packing up and moving, in part to gain more independence, according to a Fidelity Clearing & Custody Solutions study released Monday.
And more of the advisors are making the move as part of a team, the study said.
Based on its survey, Fidelity estimated about 23 percent of advisors in the industry have moved during the past five years. The percent who moved to RIAs or established their own firms increased to 64 percent of the total who moved, compared with 50 percent during the previous five years, according to Fidelity.
“Advisors are realizing their own business vision and finding they can better serve their clients as an independent,” said Tricia Haskins, vice president of practice management and consulting at Fidelity Clearing and Custody Solutions.
Of those who moved, 92 percent reported they were happy with the decision. The Advisor Movement Study is based on surveyed responses from 476 advisors. “The ‘movers’ believe this will result in greater opportunities for growth and contribute to continued success in the future,” Haskins said
Those who move are bringing more in assets with them than in the past. Median assets moved in 2017 were $75 million, compared to $37.5 million reported in Fidelity’s 2012 study.
Advisors said they were afraid of the unknown, of the cost of the move, and that clients would not follow them, but none of those things became significant factors in the actual move, the study showed. In fact, almost all clients traveled with the advisors, said Charlie Phelan, vice president of practice management and consulting at Fidelity Clearing & Custody Solutions.
Peer pressure appears to be playing into the trend. Sixty-three percent of those who moved identified their peers as influential to their decision in 2017, compared to 50 percent in 2012.
At the same time, more advisors moved as part of a team. Almost half of movers (47 percent) moved along with a team in 2017, versus 34 percent in 2012.
For the firms recruiting the teams, “articulating how a firm will support advisor teams during a move is an important piece of the recruitment strategy,” Phelan said.
“Advisors who specialize and are part of a team of other specialists tend to move as a team,” Haskins added.
Of those who moved, 31 percent started their own firms, while more than two-thirds joined existing firms.
“Advisors thinking of moving need to do their research, do what is best for the clients, and prepare well,” Haskins said. “More than a third of the advisors who moved said afterwards they should have done it sooner.”
