Moving from wirehouses pays off

Breaking away from the wirehouses has paid off handsomely for financial advisers over the past five years, according to a new study from Fidelity Investments.

Advisers who went from a wirehouse to an independent registered investment adviser or an independent broker-dealer saw compensation increase 36% since 2008, according to Fidelity’s second annual Insights on Independence study, which surveyed 783 advisers with more than $10 million in assets under management.

Those who moved from a wirehouse to another wirehouse or from an independent shop to a wirehouse saw compensation increase 22%, and advisers who stayed put saw compensation increase 17%, according to the survey.

Advisers who jumped ship re-ported keeping about 79% of clients.

NOT PREPARING

The biggest regret that advisers who switched firms have is not preparing for the move better, especially when it comes to the operational side of the business.

“They all say they underestimated the challenge of making the move,” said Sanjiv Mirchandani, president of National Financial Services LLC, Fidelity’s clearing subsidiary. “The one thing they wish they’d done differently is planned better.”

Female and Generation X and Y advisers were most likely to have considered a move in the past five years without actually doing so, the study found.

Still, just 37% of the so-called fence sitters reported being happy at their current jobs.

Family played a key part in those advisers’ staying.

Almost a quarter of advisers who considered leaving said that their family didn’t approve of a switch. Just 8% of the fence sitters said that their family did approve.

“If you want to get a new adviser, take them and their spouse out to dinner,” Mr. Mirchandani said.

Related Topics: Fidelity Investments