Most advisors who went independent say they made the right decision and a year later say it worked out, Charles Schwab says in a new study.
“More than 90 percent of advisors would make the decision again and are happier now that they are independent,” according to Schwab’s “Independent Advisor Sophomore Study.”
The study said that most advisors make the transition to a registered investment advisor within a year and that “seven in 10 advisors have increased their revenue since going independent.”
And the overwhelming majority of respondents, 93 percent, said, “I am happier now as an independent advisor,” according to the study.
The study also found that going independent didn’t hurt business: Advisors said they retained 87 percent of clients.
About half of the newly independent RIAs said “working with a fiduciary” is the most important benefit they are now offering clients. Most advisors also said they went independent “to gain the freedom to do what is best for the client,” according to the study.
Most respondents started their careers at full-service banks or brokerage firms or national or regional brokerages.
A Schwab official said the movement to an RIA model has been gaining strength over the past five years.
“There’s no sign of slowing down of our activities. The case for the independent is more compelling now than it has ever has,” said Jon Beatty, Schwab's senior vice president and relationship manager. “Independent advisors are the growth story of the advice industry.”
Indeed, the trend has become so strong, added an executive who helps wirehouse advisors go out on the their own, that independents are quietly growing faster than full-service firms.