Seasoned financial professionals looking for more control over their careers and more opportunity to build wealth believe they can find it by moving to the RIA channel, according to a survey by TD Ameritrade Institutional.
Overall, 44 percent of brokers said they are likely to move in the next 12 months and nearly half are more interested in moving than they were at the end of 2018, the survey showed.
The survey focused on 118 brokers or “potential breakaways” who indicated they planned to go independent within two-to-three years, and 337 advisors or “breakaways’’ who were already at an independent RIA. Respondents were on average 50 years old.
Sixty-five percent are troubled by regulatory issues, which they said negatively impacts their firm and 46 percent said pricing pressure is another challenge they face.
A good portion of brokers indicated that their firm’s culture and leadership are not acceptable. Forty-three percent are dissatisfied with their firm’s corporate culture, 42 percent unhappy with the leadership /and strategic direction and 33 percent are disappointed with their compensation.
Those seeking more control (34 percent) and a higher compensation (34 percent) believe there is more money to be made by moving to independence. In fact, two-thirds believe they’ll earn more as independent RIAs.
Potential breakaways don’t necessarily want to go it alone. Thirty-six percent plan to acquire or merge with an existing firm, and 33 percent want to join an existing RIA.
And while brokers are eager to enter the RIA space, fear of the unknown gets in the way. More than half 54 percent) said the transition will be too difficult, citing managing legal and compliance issues as top concerns.
Furthermore, 56 percent indicated that their firm’s stance on broker protocol agreements would somewhat or significantly impact their move.
The brokers considering the RIA channel can look to those who have already taken the plunge to independence for support and assurance. The breakaways indicated that the grass is greener on the other side. Eighty percent say the transition was easier than expected, and 72 percent said they transitioned all the clients they wanted to keep when they became a RIA.