Connect with us


Are Wirehouses Paving Their Own Pathway to Independence?


Wirehouse advisors seeking independence may not have to break away.

They can operate as “captive independents” within their existing firms. But will this model be independent enough?

Earlier this month, AdvisorHub reported that UBS was about to launch a “business to serve independent advisors.” Although the article was scant on details, and no other publication has written about it since, I’ve had many conversations with advisors that have yet to be resolved.

Even if the article was a gilded version of the rumor that’s been circling for some time, the premise is significant nonetheless.

While wirehouses have long refused to acknowledge the momentum towards independence – often dismissing any “breakaway” losses as one-offs and anomalies – the trend is undeniable. Over the past decade, even the biggest naysayers have found it hard to rebuff the validity of the exodus as they watched so many multi-billion dollar teams leave the brokerage world to launch their own independent firms.

The story about UBS signifies the beginnings of a thought-transition amongst the big firms. That is, it is an acknowledgment that the independent space is indeed valid and worthy of not only their attention, but also their participation.

Related: The 10 Most Valuable Insights on Advisor Independence

And it makes sense; here’s why:

  1. It’s a great way to stave off advisor attrition – and keep top talent in-house.
  2. It’s better for clients – allowing advisors to offer more customized service models.
  3. It acknowledges changing advisor sentiment – and provides a pathway to better align with these changes.
  4. It’s a reality that’s not going away.

With so many advisors serving high-net worth and ultra-high net worth clients, brokerages are looking for ways to retain these corner-office folks – offering them the allure of independence right in their own backyard.

What would an independent model launched by a wirehouse look like?

An independent arm within a wirehouse is one I would call “captive independence.” And it’s not something entirely new: Raymond James and Wells Fargo have been offering an independent broker-dealer option for years.

This first appeared here.

Continue Reading