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Charles Schwab Corp's campaign to help stockbrokers become independent investment advisers has been picking up speed.
Last month, Schwab helped 15 teams leave broker-dealers to join registered investment advisers or set up their own RIA firms, bringing the year-to-date total to 101.
This month, several more teams have migrated, bringing the 2009 total as of the middle of last week to about 115 teams. In the first eight months of 2008, just 75 teams of breakaway brokers moved assets from broker-dealers to Schwab.
Other custodians also are seeing more broker migration, after more than a year of outreach to brokers frustrated with the negative reputations of large broker-dealers.
TD Ameritrade Holdings Inc. said its RIA group this year has attracted 87 teams of brokers, up 47% from 59 teams a year earlier. The company didn't break out how many assets the brokers manage.
Year-to-date, Pershing Advisor Solutions LLC has moved 18 teams with about $2.4 billion of assets under management, including six teams with about $1.2 billion of assets that that have set up shop just this month, said Pershing spokes-man Michael Geller. Pershing, which said the new teams are still in transition, didn't offer comparative numbers for 2008.
Although wirehouse brokers appear to be more confident about changing their business models and bringing clients with them, it is still too early to analyze the end-of-summer acceleration, the custodians said.
“I don't know if I've seen enough to say there's been a sustainable uptick,” Barnaby Grist, Schwab's senior managing director of strategic business development, said during an interview last week at the firm's annual Impact conference for RIAs in San Diego. “What has changed since June is that the size of the teams and their assets has risen.” Schwab declined to break out the asset total.
The breakaway trend this year has centered on individual brokers or small teams nervous about the rapid decline in the value of client portfolios and, perhaps, about their status at their companies.
About 60% of the breakaway brokers this year have set up their own firms, with the remainder, generally smaller teams, joining existing RIAs, Mr. Grist said said.
The market's rise may have helped convince teams of brokers to take the plunge to independence. Many want to hit certain asset benchmarks before making their move, he said.
The biggest team Schwab has moved this year is Three Bridge Wealth Advisors LLC, a Menlo Park, Calif., team of three former Morgan Stanley Smith Barney brokers with about $750 million of assets under management.
E-mail Jed Horowitz at [email protected].
