Why the breakaway trend continues to thrive

  • Published: December 08, 2013
  • Runtime: 2:05
New firms offering money and turnkey solutions to entrepreneurial advisers are having a banner year, according to Mindy Diamond, president and CEO of Diamond Consultants.
The breakaway broker trend is very much continuing full steam ahead. What's driven it is the real expansion of the independent space with new and legitimate models being born everyday that solved for what kept people from going independent for years, wanting money and a turnkey solution to get there. And all these different models offer different brands or amounts of independence depending upon how entrepreneurial somebody wanted to be. So, new models like Lebenthal entering the space, Cantor Fitzgerald, Robbie Stevens, high tower advisors that's been around for 5 or 6 years. focus financial partners, Dynasty Financial Partners are all having better years. In terms of break-back broker, it's a much rarer phenomenon. It's rare because it's rare to find a principal of an independent firm that has built an enterprise that is willing to give up his enterprise to be put back in the box. He would have to jettison most of his staff. He would have to go to a payout somewhere in the mid to high 40s. So, it's very rare to find the independent that wants to do that. We've seen some. There have been some that worked in the independent broker-dealer world that wound up going to a wirehouse. They were largely a standalone independent with maybe one or two staff late in their career who liked the idea of monetizing for big bucks and off loading them a new show running a business. Most advisors that leave the wirehouse world do it because there are some piece of them, some entrepreneurial DNA that's not being satisfied, and most-- the most common refrain is I wish I did it sooner, and that surely doesn't mean that independence is for everyone. But most often, once an advisor goes independent, they're usually pretty happy to be there.

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