Advisor Movement - Woe to the Wirehouse or Over-Hyped Talking Point?

Over the past two years, much has been made about the flight of wirehouse advisors to the independent space and setting up under a fee-based fiduciary standard as an RIA.While there is certainly an allure to going fully independent, it often requires an entrepreneurial attitude that welcomes challenge and risk. Maintaining a staff, ensuring regulatory compliance, establishing relationships with asset managers, managing technology all create significant barriers to entering the market. Thus, many advisors are considering a dual registry. This hybrid practice offers flexibility for those who want to maintain their own RIA with the ability to leverage a broker-dealer to provide clients other asset types. Despite all this talk about movement towards the independent space, regional wealth manager growth is often overlooked, as is movement between wirehouses. Advisors switch between wirehouses more often than they move to the independent space. What can we infer about this? I believe it means that the drive for independence is trumped by the need for tools and a good signing bonus. Looking ahead, regional wealth managers and private banks are making aggressive pushes in the advisory market; independent B/Ds have been gobbling up the mass affluent customer segment that wirehouses have been focusing less on. These trends may spell trouble for the wirehouses. However, not all is lost for the wirehouse model. Many wirehouses have locked up high value advisors with long-term contracts, surveys show wirehouse advisor satisfaction improving, and technology is improving. This will ultimately ensure that the wirehouses will retain the largest market share.