A quiet but accelerating migration is reshaping the RIA landscape: rather than spend their careers as employees of someone else's company, more and more advisors at firms bought by aggregators are walking away to launch their own independent practices.
That's according to Jason Wenk, founder and chief executive of custodial platform Altruist, who's had a front-row seat to the trend via his firm's new-client data.
"This trend started very early," Wenk said. "It's been going on for a few years, but I'd say it's accelerated in the past couple of years."
The structural dynamic driving it isn't complicated. As M&A activity in wealth management has stretched over the past 15 years, many employees of acquired firms have sunk years of their post-acquisition work life without accumulating meaningful equity.
Because aggregators typically buy firms from founders, and not from staff, the generation of advisors who came up under those seller-owners generally had no shareholder rights to begin with; in many cases, they were part of a succession plan that ultimately never materialized.
"Their path to meaningful ownership is essentially non-existent," Wenk said.
Altruist distinguishes between "breakaways" – advisors leaving wirehouses or broker-dealers for independence for the first time – and "breakouts," who are already in the independent channel but have never owned their own firm. The second category is where much of the aggregator-exit wave is landing.
About 40% of all new business coming onto Altruist's platform is either breakaway or breakout, Wenk said, with the two groups now roughly at an even split. In other words, advisors who leave existing RIAs as employees – the aggregator-exit cohort – currently represent about 20% of all new firms on the platform. With approximately 700 new RIAs added last year, that translates to roughly 140 firms on Altruist's platform that were launched by deserters from an acquired RIA.
The early economics of these launches tend to look modest. Non-competes typically throttle what clients a departing advisor can bring — generally limited to those acquired through personal referrals, not those assigned by the firm. For next-gen breakouts, that means starting somewhere between $10 million and $40 million in AUM.
But Wenk argues the math still works. "If someone can take $25 million – the midpoint of that range – and charge 1%, they know on day one they have $250,000 of revenue and they can start building their own business on their own terms," he said.
Operating costs for lean, virtual practices can be surprisingly low: Wenk estimates those expenses can be as low as $10,000 a year, covering outsourced compliance, insurance, and technology. The steep drop in expenses means even those who experience a significant top-line decline from leaving a salaried aggregator role – where total compensation might range from $200,000 to $250,000 – can come out substantially ahead.
"They might go from $200,000–$250,000 as a W-2 employee to $185,000 as an independent owner – with full autonomy and about 90% of their time freed up, because they've gone from managing a massive book to a small one," Wenk said.
That freed-up time creates more room for organic growth through client service and business development. With that, Wenk said many of these advisors are able to expand at 30%, 50%, or even 100% annually in their early years of independence – three to five times the industry average.
"I suspect organic growth is exactly what buyers of those RIAs were hoping to retain post-acquisition," Wenk said. "The data suggest they're not getting much of it."
The long-term financial argument for independence also compounds over time. By Wenk's math, a below-average financial planner who doubles AUM every five years, starting with $25 million at age 35, would after 25 years be running a firm with $800 million in assets. At 80 basis points of revenue and a 40% EBITDA margin, that's $3 million in annual earnings and a firm potentially worth $30 million at a 10x multiple.
"If you stay as an employee inside an aggregator and achieve that same success, you'll earn less income along the way, have less autonomy, and walk away without that $30 million in equity," Wenk said.
Beyond the financials, Wenk pointed to a cultural friction that builds over time. Aggregators consolidate workflows to gain scale with standardized planning approaches, investment strategies, and service models. While that can make sense – it can help ease the challenges of tech integration, for example – it also tends to chafe against advisors who actively sought out the independent channel.
"If you're an advisor who chose independence over a wirehouse or a bank, you deeply value your autonomy," Wenk said. "Being told what to do – in a channel that was literally designed for independence – creates friction."
To help retain their next-gen, some aggregators have offered junior advisors small allotments of synthetic equity – ownership units worth a few hundred thousand to a couple million dollars over time. But according to Wenk, those incentives often fall short of what growth-minded talent expects.
"For an advisor who could instead be part of a high-growth, mission-driven firm – or build their own – those carrots often aren't enough," Wenk said.
Once advisors launch their own firms, how they scale varies widely. Some rely entirely on referrals: Wenk cited one advisor who grew from $60 million to $300 million in AUM purely through client service, with no marketing spend. Others lean into education – YouTube channels, podcasts, seminars, college classes – or paid lead platforms like SmartAsset.
Not all breakout advisors are building toward large enterprises. A solo advisor managing $75 million, working 30 hours a week and earning $500,000 annually, may not turn heads in industry rankings, but that profile can still be compelling next to a salaried aggregator role.
Wenk estimates that roughly half of all RIAs are state-registered, meaning they manage under $100 million, and most are likely breakout advisors who found a sustainable model.
"The most common thing we see – and I'd say the dominant path – is simply showering clients with love and attention, letting that combine with capital market tailwinds, and watching the firm double every three to five years," Wenk said.
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