The independent channel is seeing the most growth from advisors on the move, as well as yielding the greatest compensation increases, according to Fidelity Investments’ 2nd annual Insights on Independence study.
The study explored the motivations and experiences of advisors who moved firms in the last five years (movers), those who considered a move but opted not to make a switch (fence sitters), and advisors loyal to their firms (entrenched).
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
According to the reports, financial advisors who moved firms saw a 22% increase in their compensation over 2008 (vs. 17% for advisors who stayed at their firms). Those who moved to an independent business model, such as a registered investment advisor (RIA) or an independent broker-dealer, realized a 36% increase since 2008.
The survey found that when family is involved in the decision-making process, they had a major influence in encouraging movers to make a switch (40% of movers’ family members encouraged the move compared to only 4% who discouraged it); yet, family had the opposite effect for Fence Sitters, more often discouraging the move.
Fidelity Investments’ report adds that movers and fence sitters were more likely to be Gen X/Gen Y advisors and embracing the move toward more fee- and team-based business than their entrenched counterparts. Female advisors were most prevalent in the fence sitter group, and least likely to be movers.
Sanjiv Mirchandani, president of National Financial, a Fidelity Investments company, said that this study illustrates the changing face of the advice industry.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalData"While compensation clearly plays a role in advisor movement, the next generation of advisors is considering the whole package — from the type of services they can offer their clients to whether the new firm is a fit for the entire family. Understanding these dynamics can help firm leaders recruit or retain advisors ‘on the fence,’ and help advisors better consider their options," he added.
According to the report, nine in 10 movers said they were happy with their decisions to switch firms, and 77% reported they were better off financially.
Movers reported that 79% of the clients they wanted to follow them moved to the new firm. These advisors were also able to strengthen their books of business, increasing their share of walleti with 54% of the clients who moved with them.
Fence Sitters reported that "life" often trumped work in their decisions not to move firms, citing family reluctance, "bad timing" for the family and commitments such as caring for aging parents.
The study found that fence sitters are an attractive group of advisors with the highest average assets under management (AUM) of all three groups — $155 million AUM compared to $149 million for movers and $147 million for entrenched advisors.
