With tens of thousands of financial advisors on the move each year, every wealth management channel should take cues from the independent firms that are attracting them, a new study said.
The Rise of Independent Firms in Wealth Management
An estimated 25,443 advisors managing $3.06 trillion in client assets switched firms through recruiting and M&A deals in 2025, according to a report last month by research and consulting firm Cerulli Associates. The rise of registered investment advisory firms and RIA accounts has driven the share of wealth management client assets managed under the fiduciary duty to 58% in 2024 from only 40% in 2014. Independent and hybrid RIAs have boosted their share of industry assets by six percentage points to 27% over that span. Cerulli projected that independent broker-dealers and hybrid RIAs will see the largest increase in their portion of industry assets from 2025 to 2029.
The data highlights how “independence is a spectrum,” said Jason Diamond, the president of advisor recruiting firm Diamond Consultants. While RIAs and independent advisory firms are growing rapidly, they also face recruiting and retention challenges. The largest firms in any channel no longer have as much of an edge, and RIA aggregators have become more restrictive in contracts and deal terms to retain advisors and assets.
Despite the challenges, the flow of advisors and assets remains strong across the industry. Approximately 60% of advisors and 58% of assets that moved to a different wealth management company remained in the same channel. Firms from any channel could benefit in the fight for advisor talent by adapting to the ongoing shift toward RIA accounts and independence.
The Advantages of Independence
Advisor preferences clearly favor independence, according to Stephen Caruso, an associate director of wealth management with Cerulli. Firms that treat advisor mobility as an opportunity and align with what advisors seek— independence, autonomy, better support systems, and the ability to build long-term business value—will emerge as winners in the realignment.
Among advisors surveyed by Cerulli, 71% expressed a preference for an independent channel if they were planning to move to a new firm in 2024. Independent RIAs have a high retention rate, with 88% of advisors likely to stay with their current firm for the next year.
Key Data Points
Here are some of the most interesting data points from Cerulli’s report:
- Wirehouse advisors are most likely to move, with 26% expressing uncertainty about remaining with their firm.
- Higher payout is the biggest lure for advisors considering a move to an independent firm, with 58% citing it as a major factor.
- Client loss is the biggest concern for breakaway advisors, with 65% worried about losing clients during the transition.
Switching channels can be costly, with advisors facing asset losses when moving between different types of firms. The trends point to winners and losers in the share of advisors and assets across industry channels, with independent RIAs projected to experience significant growth.
Adapting to Industry Trends
Employee channels of wealth management can align their businesses with the trends by investing in methods to support early-career advisors and reduce attrition rates. Firms must address cultural and operational challenges by granting advisors greater autonomy, transparent communication, and aligning compensation structures with client interests.
Given these dynamics, captive B/D firms must adopt strategies that improve advisor retention, satisfaction, and retirement programs. Firms that prioritize these aspects will be better equipped to compete in the evolving advisor landscape.
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