The pandemic only highlighted the shortcomings of many wirehouse tech stacks, and advisors now realize—if they hadn’t before—that the independent channel offers the freedom, flexibility and nimbleness to choose the tools and platforms that fit the business’ goals, without the dead weight of institutional baggage dragging down growth.
Culture
Much of the draw of wirehouses is the camaraderie, close working relationships and collaborative culture that grows from working alongside one another in an office. Younger advisors in particular say they enjoy the feeling of being part of something bigger than themselves.
Yet, it would be a mistake to assume that this sort of culture can’t be found outside a wirehouse. Many independent RIAs—small, large and everywhere in between—have cultures built around collective missions of entrepreneurship, growth and teamwork, while nonetheless prioritizing a client-centric approach.
Advisors are quickly realizing that culture has little to do with employed or independent status and they do not have to pay out a large slice of revenue up-front to get it.
Migration Accelerating
At this time, the breakaway trend is well past its tipping point. The pandemic has accelerated the pace of migration towards the independent channel.
We have entered a paradigm shift since the onset of the pandemic, and we can expect independent RIAs to continue on a growth trajectory, attract top talent, shrink turnover costs and ultimately assemble a more engaged and effective network of professionals.
Charles Shapiro is a founding partner and chief development officer for Stratos Wealth Partners, a partner-run wealth and financial management firm that specializes in comprehensive financial planning and wealth management services.