The breakaway broker trend is real and only getting more so, according to the latest research from TD Ameritrade Institutional, which Monday morning released its 2017 Breakaway to Independence Survey.
"There is an undercurrent of discontent as disenchanted brokers navigate the second half of their careers," said Scott Collins, director of brokerage independence at TD.
"Midcareer breakaways have enough tenure to realize that they have options, and that the independent RIA path can offer a better way to serve clients and advance their careers," he added.
The survey of 134 midcareer brokers who said they plan to go independent within the next three years, was conducted in September, prior to Morgan Stanley and UBS exiting the broker protocol, and prior to the latest delay of the Department of Labor's fiduciary rule until at least 2019.
In terms of the DOL rule, the survey found that 55% of respondents said they planned to wait and assess the potential impacts before breaking away.
Meanwhile, 26% of respondents said the looming rule that would require advisers to act as fiduciaries over retirement-account relationships is driving them to consider breaking away sooner.
On the topic of broker protocol, which was triggered by Morgan Stanley's late October announcement, Mr. Collins does not anticipate a big impact on advisers leaving the brokerage industry for the independent channel.
"I think they will continue to move, regardless," he said. "Overall, if an adviser or rep is an entrepreneur, they will continue to move. Brokerages are signaling who owns the client relationship, but the client will ultimately make that decision."
One of the factors that Mr. Collins believes will continue to drive the breakaway movement is illustrated in a survey response showing that only 10% of respondents are worried about abandoning the brand-name status of a brokerage firm.
"Twenty years ago, that number would have been much bigger," he said. "This shows you that the RIA channel has become much more mainstream, while the wirehouse brand has gone through its ups and downs over the years."
Louis Diamond, vice president at Diamond Consultants, said the brokerage industry has suffered enough "black eyes" since the 2008 financial crisis that it no longer carries the same level of swagger with consumers.
"Advisers are no longer thinking they need the wirehouse logo on their business card to be successful," he said. "Breakaways have come to realize their clients are with them — for them."
Industry recruiter Danny Sarch agreed that the idea of going independent has come a long way over the past several years.
"As recently as 10 years ago, nobody asked about independence because it was seen as where the advisers on the lower end went to survive," he said. "They would go to an independent broker-dealer to double their compensation, and the RIA route was even more rare, because it was rare for anyone to be fee-based enough to be an RIA."
Among the biggest factors driving brokerage reps out the door, according to the survey findings, are a lack of satisfaction with the following: corporate culture, leadership, career opportunities and compensation.
Meanwhile, the appeal of breaking away includes greater independence and flexibility, opportunity to earn more money, day-to-day control of operations and equity ownership.
The top concern of brokers still on the fence is managing legal and compliance issues, which was cited by 46% of survey respondents.
The next biggest concern was the difficulty of the transition and fear of losing clients, at 25%.
"The fear versus reality isn't necessarily the same thing," Mr. Collins said. "Some of the transition fears are valid, but there is lots of industry research that shows 90%-plus of targeted assets follows the breakaway broker."