There is some debate as to the official launch of the breakaway advisor movement, when advisors began leaving the shackles of the captive wirehouse environment for the freedom and independence of the RIA community. In order to pinpoint an exact date, we not only need to consider the exodus of advisors, but we also need to consider at what point was there a true RIA industry that advisors could break away to.

While there are plenty of RIAs that are over 20 years old, it is a safe estimation that the first major “Breakaway Advisor Movement” started sometime in the mid-to late ‘90s and gained further traction after the tech bubble in the early 2000s. At that time, new PC-based technology, the Internet and re-engineered discount brokers arrived on the scene to create new platforms that could house these new businesses and replicate much of what they left behind in the wirehouses

Regardless of when advisors officially launched their RIA, it seems that almost everyone cut their teeth at the wirehouses and learned the ins and outs of the wealth management business while working as a captive employee. Over the next decade, as it became apparent that this movement to independence was real, opportunistic service providers began popping up to assist advisors in their transition. 

Newly formed aggregators provided all-important startup capital and transition assistance for an equity stake in the newly established RIA. Middleware platform providers charged basis points over a multi-year service contract in exchange for transition assistance and for providing a “plug and play” technology back office stack that got the breakaway teams up and running.  At the time, these were incredibly valuable services in the early days, when the breakaway movement was still relatively new and advisors didn’t have the knowledge of what was required to establish an RIA or what was needed to run their own business.

As the industry continued to grow and mature, large teams continued to leave the employee model for the entrepreneurial model throughout the first decade of the 2000s. Encouraging the leap to independence were those who went before them, as wirehouse advisors suddenly had more and more friends and former colleagues who had made the jump—both on their own and with the assistance of the aggregators/platform providers. 

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