The independent RIA model is the only growing sector in the financial advice business, according to research released Tuesday.
The research firm Cerulli Associates Inc. said the number of advisers practicing as independent RIAs grew at a rate of 8% per year between 2004 and 2012.
But that nine-year period, which included the financial crisis, took a bite out of the broker-dealer models promoted by regional firms, insurance companies, independent broker-dealers and banks.
Wirehouses – the brokerages owned by Bank of America Corp., Morgan Stanley, Wells Fargo & Co. and UBS AG – suffered the most, losing 2.5% of their advisers per year, according to Cerulli, which cited Bank Insurance Market Research Group, Investment News and Meridian-IQ, in addition to its own data.
The industry as a whole lost 1.2% of its advisers each year, the report said.
The report also points to an increasing blurring of the lines between channels, as independent firms get larger and broker-dealers roll out new programs for the so-called breakaway advisers who leave brokerages. (Cerulli counts dually registered advisers in both the RIA and broker-dealer categories.)
Why RIAs are hiring COOs to help the firms grow