Over the past 12 years, the Investment and Wealth Institute (IWI) membership has become more independent and advisory-fee oriented, according to a Cerulli report.

The shift away from wirehouses and towards independence accompanies similar changes in the industry as a whole. While IWI advisors, who are often in the upper levels of the industry serving the most wealthy clientele, might have been expected to make this transition more slowly, a Cerulli Associates study fielded in 2018 suggest that is not the case.

In a survey of about 300 members of IWI, which was formerly known as IMCA and has a total membership of about 12,000 advisors, Cerulli found that 45% of IWI members work in an independent firm; 23% work as independent RIAs; 13% in a hybrid firm; and 9% in independent broker-dealers. That's up from 2007, when the IWI reported that less than one-fifth of its 2007 membership were in an independent channel.

IWI’s membership is in some ways not representative of the broad U.S. advisor industry,  according to Cerulli, IWI members are more likely to have high-net-worth clientele. While Cerulli estimates that just under 20% advisors overall concentrate on client with $2 million or more in investible assets, nearly 40% of the IWI’s membership focuses on clients with $2 million in net worth or above.

IWI members, on average, also have higher firm and individual advisor AUM than advisors overall, according to Cerulli.

The Institute’s advisors also skew older than the industry as a whole: 52.1% of its advisors come from the baby boomer generation (ages 52 to 70) and 56.5% of its membership have 20 years or more of experience in the financial industry.

In other words, Cerulli’s IWI study suggests that independent, fee-oriented financial planning is not just embraced by younger advisors with few assets to manage.

As more of the IWI membership becomes independent, according to the report, their dominant service offering is changing: 54.7% are offering comprehensive, ongoing planning and advice, which, based on other surveys, compares to about 47.2% of advisors for the overall advisor industry, according to the report.

A smaller proportion of IWI members and advisors as a whole are offering targeted planning to address clients’ specific needs. Just 22.5% of Institute members and 21.6% of advisors overall are offering targeted planning, according to the report.

Survey respondents said they anticipate greater adoption of comprehensive planning in the future. For example, 55.1% of advisors overall foresee offering comprehensive planning services in the future, and 63.8% of Institute members said the same.

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