Pursuing what matters most when you go independent

For Anthony David, taking his business independent was also deeply personal.

The father of three, a first-generation Filipino American, was approaching 20 years at Morgan Stanley when his second son arrived 14 weeks prematurely in 2019. For the next four months, David continued to serve his clients, much of the time from his son’s bedside in the neonatal intensive care unit.

As an adviser who works closely with small business clients, ownership had always appealed to David, but the experience of balancing business with family through a difficult time hardened his resolve to strike out on his own. The pandemic later provided the final nudge and in August 2021, he launched Washington, D.C.-based Adalan Private Wealth with Raymond James.

“There’s not a lot of entrepreneurs with faces like mine,” David said. “I said to myself, ‘I would be doing my family and, quite frankly, minorities as a whole a tremendous disservice if I didn’t do something that I truly believed I could accomplish, and if all that was holding me back was fear.’ I wanted my children to know that it’s OK not to settle.”


David is just one of hundreds of advisers for whom the pandemic provided a final push to go independent. Advisers leaving wirehouses for independent broker-dealers and RIAs is nothing new, and wirehouses by now have largely withdrawn from the recruiting wars in favor of raising their own through the ranks. But the trend seems to have intensified a year after most employee-advisers were suddenly left without the resources or supervision of daily office life.

“Advisers, without their manager looking over their shoulder, are able to spend as much time as they need to, both in the due diligence process and working on the transition,” said Nate Lenz, co-founder of breakaway partner Concurrent Advisors, which worked with David and 27 other advisers in 2021. “We saw enhanced results in recruiting and no slowdown whatsoever in folks becoming independent.”

The data for the industry say much the same.

Overall, recruiting activity slumped significantly in the spring of 2020 alongside the closure of offices and cancellation of in-person networking events. Although it partly rebounded in 2021, moves of advisers between firms during the year remained 12.4% below their pre-pandemic level, based on transitions tracked by the InvestmentNews Advisers on the Move database.

“We saw … no slowdown whatsoever in folks becoming independent.”

Nate Lenz, co-founder, Concurrent Advisors

Yet even amid the broad slowdown in networking and recruitment, more advisers went independent than before. According to a review of the database, moves to independent channels remained steadier during the worst of the pandemic and were up 2.6% in 2021 compared with 2019. In total, 2,065 advisers on net left wirehouses in 2021, while 1,225 joined independent broker-dealers and 1,530 went to RIAs.


The allure of independence is partly financial, letting an adviser retain a higher share of the revenue they generate, even if they must also cover new expenses. But independence also represents more flexibility in how advisers build their practice, serve their clients and manage their staff.

“I think you have to have a certain level of entrepreneurial drive to build a book of business in the wealth management space,” Lenz said. “Their motivations have always been the same, but you’ve introduced additional roadblocks in their ability to do business and new options that are out there that make that leap a little shorter.”

By new options, Lenz refers to Concurrent and others — breakaway services as well as broker-dealer offices of supervisory jurisdiction and RIA aggregators — that have stepped in to soften the landing for advisers transitioning to independence. The business models vary, but all offer a combination of compliance, marketing and technology support to startup independent firms and let their founders focus on the strategic direction of the new business.

The momentum appears to be behind them for the year ahead, too. Concurrent has commitments through July representing $30 million in revenue, compared with $24 million in all of 2021, Lenz said.

Wall Street has taken notice of the trend. Dynasty Financial Partners, an early proponent of the breakaway partner model, filed for an IPO in January. The company declined an interview request, but reported 47% year-over-year growth in fee-based revenue through September, according to documents filed with the Securities and Exchange Commission. It’s seeking to raise $100 million.

There’s big money on the table, but that’s not the only thing on the minds of advisers who take the plunge.

“In the environment we’re in, in the pandemic, and as we all as individuals go through tragedies or difficult situations, it’s really nice to know that I get to make the decision as far as what’s the best for my clients, best for my staff, best for my family,” said David of Adalan Private Wealth. “It’s nice having that level of control.”

[MORE: How are firms withstanding the Great Resignation?]

2021 Top Net Gains

2021 Top Net Gains Advisers Gained
LPL Financial LLC 1,004
Fidelity Brokerage Services LLC 613
Ameriprise Financial Services, LLC 154
Raymond James Financial Services, Inc. 151
Raymond James & Associates, Inc. 139
Morgan Stanley 113
Charles Schwab & Co., Inc. 107
Cambridge Investment Research, Inc. 105
Fisher Investments 94
Rockefeller Financial LLC 85

2021 Top Net Losses

2021 Top Net Losses Advisers Lost
Merrill Lynch, Pierce, Fenner & Smith Incorporated 1,070
Wells Fargo Clearing Services, LLC 999
Edward Jones 387
Equitable Advisors, LLC 237
TD Ameritrade, Inc. 223
MML Investors Services, LLC 167
Avantax Investment Services, Inc. 167
TIAA-CREF Individual & Institutional Services, LLC 143
UBS Financial Services Inc. 109
BBVA Securities Inc. 109

2021 Channel Net Changes

2021 Channel Net Changes Advisers Gained
RIA 1,530
Independent Broker-Dealer 1,225
Discounter 482
Regional Broker-Dealer 163
Institutional 66
Bank -479
Insurance Broker-Dealer -922
Wirehouse -2,065

The post Pursuing what matters most when you go independent appeared first on InvestmentNews.

Andrew is half-human, half-gamer. He’s also a science fiction author writing for BleeBot.

Andrew Vincent
Andrew is half-human, half-gamer. He's also a science fiction author writing for BleeBot.
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