Is there really a flight to independence?

There are two questions that I'm always asked by Financial Advisers at the wirehouses these days. The first one is “what are the deals like now and where can I get them?” This one, of course, I've been asked since I've started headhunting back in 1984. The second question is: What is it like to go independent? Ten years ago, the only wirehouse Advisers who went independent were the ones who couldn't make it. Put the computer revolution in a pot along with vendors, service providers, custodians - - all devoted to duplicating and exceeding Big Firm's service capabilities; throw in a financial crisis where Big Firms almost go out of business, and now you have the recipe for an “Indy Revolution.” But is it really a revolution? Sallie Krawcheck, who runs Wealth Management for Merrill Lynch, was quoted recently as saying that independents accounted for just .2% of defections from Merrill Lynch last year. And the pages of Investment News over the last year have been filled with stories of Indy firms going out of business under the weight of bad Limited Partnership Investments (maybe I've been doing this too long, but didn't the book “Serpent on the Rock” come out in 1995?). The wirehouse model has fewer firms than ever before, and approximately 50,000 Advisers. Ten years ago, that number was over 60,000 Advisers and there were many more firms to choose from. Considering the aging of the population, natural attrition, and what the world went through in 2008, I personally do not consider this number to be that dramatic. Clearly, there has not been a diaspora to independence which by itself threatens the Big Firm model's long term existence. The vast majority of wirehouse Advisers are NOT suited to run a business at the same time that they are running their practice. So, that being said, why is the “Flight to Independence” getting so much attention? The indy movement has been emboldened by the success of the larger teams that have successfully made the jump, either to an RIA model, or to an Independent BD model. Advisers love to talk, and that talk fuels curiosity, speculation, discussion and misconceptions. And there are many different “shades” of independence; lumping this group all together is naïve, like going to a paint store and thinking that once you pick white for your kitchen, there is nothing left to discuss. Indeed, I am getting approached by a new type of model every single month. Next column: Examining the different types of firms in the Independent Adviser movement. Headhunter side note and personal pitch: I am riding my bicycle August 6 and August 7th in the PanMass Challenge in support of cancer research. If the thought of Sarch peddling 190 miles over two days amuses you, or if you have been touched by the scourge of cancer in any way, please consider donating to this worthy cause. You can view my page here. Thanks in advance and you may give anonymously.