More Than Ever, Brokers Are Keen to Join the Independence Movement, New Survey Commissioned by TD Ameritrade Institutional Fi...
January 30 2020 - 8:00AM
Business Wire
Control, Compensation and Clients Remain Top
Motivators For Going Independent
The independent registered investment advisor (RIA) channel,
with its potential for greater control, a better quality of life
and the opportunity to better serve investors, continues to inspire
wirehouse and independent brokers to switch sides, according to a
survey of RIAs and prospective breakaways conducted for TD
Ameritrade Institutional1.
According to the TD Ameritrade Institutional 2020 Break Away to
Independence Survey, 55 percent of potential breakaway brokers –
those at national, regional firms or independent broker-dealers
considering a move to independence within three years – say they
will make their move within the next 12 months. That’s up 11
percentage points from the 44 percent expressing the same sentiment
in the spring 2019 survey.
And nearly half of these potential breakaways, 47 percent, feel
even more strongly about switching to independence now than they
did last spring.
The RIA model offers brokers the opportunity to increase their
compensation as the owners of their own practice. Three out of four
breakaways anticipate better compensation as RIAs as compared with
their current firms, and yet pay is not the only motivator.
Prospective breakaways also have expectations of greater control
over their own business and their own destiny.
Brokers say they have several reasons to consider leaving their
firms and making the switch, but those most commonly cited include
regulatory and pricing pressures. Forty-four percent of brokers
said they were not satisfied with their compensation, up from 33
percent in the spring last year.
And while there are hurdles to be cleared – including the time
and effort to complete a transition – the overwhelming numbers of
advisors who previously made the leap have a reassuring message for
potential breakaways: going independent is well worth the
effort.
Consider that 80 percent of RIAs said their quality of life is
better than before, 75 percent said the transition to independence
was easier than expected, 72 percent said the technology is better
and 70 percent said separating from their employer’s brand actually
helped their own bottom line.
RIA participants in the survey are on average 51 years old, work
41 hours per week and oversee $214 million in client assets.
Brokers in the survey, also 51 years of age on average, work 44
hours a week on average and oversee about $95 million in
assets.
“Time and again, brokers who make the move to the independent
RIA channel tell us their biggest regret is they didn’t switch
sooner. Advisors also don’t need to feel as if they are on their
own during the process: TD Ameritrade Institutional offers a full
suite of services to make the transition as smooth as possible,”
said Scott Collins, managing director at TD Ameritrade
Institutional who oversees recruiting of brokers to become new RIA
clients. “There’s never been a better time to make the move.
Indeed, the biggest risk to your business may be staying put.”
Download the TD Ameritrade Institutional 2020 Break Away to
Independence Survey to see more highlights and insights. TD
Ameritrade Institutional also invites brokers to visit the online
Exploring Your Independence Business Evaluator at
https://www.exploringyourindependence.com/#/splash.
About the Survey
The TD Ameritrade Institutional 2020 Break Away to Independence
Survey was developed to help understand what motivates
professionals at full-service broker-dealers and independent broker
dealers to consider making the transition to the independent RIA
channel. The research firm Escalent, on behalf of TD Ameritrade
Institutional, in October and November 2019 conducted an online
survey with 349 independent RIAs and 100 brokers who said they
might go independent within two to three years. The margin of error
for this survey is +/- 5.8%.
TD Ameritrade Institutional and Escalent are separate and
unaffiliated companies and are not responsible for each other’s
services and policies.
About TD Ameritrade Institutional
TD Ameritrade Institutional empowers more than 7,000 independent
registered investment advisors to transform the lives of their
clients. It provides powerful technology and resources that help
simplify running a business and let advisors spend more time doing
what matters most — serving their clients. Through meaningful
innovation, steadfast advocacy and unwavering service, TD
Ameritrade Institutional supports RIAs as they build businesses
that positively impact their clients and communities. TD Ameritrade
Institutional is a division of TD Ameritrade, Inc., member
FINRA/SIPC, a brokerage subsidiary of TD Ameritrade Holding
Corp.
About TD Ameritrade Holding Corporation
TD Ameritrade provides investing services and education to more
than 12 million client accounts totaling approximately $1.4
trillion in assets, and custodial services to more than 7,000
registered investment advisors. We are a leader in U.S. retail
trading, executing an average of approximately 1 million trades per
day for our clients, more than a quarter of which come from mobile
devices. We have a proud history of innovation, dating back to our
start in 1975, and today our team of 10,000-strong is committed to
carrying it forward. Together, we are leveraging the latest in
cutting edge technologies and one-on-one client care to transform
lives, and investing, for the better. Learn more by visiting TD
Ameritrade’s newsroom at www.amtd.com, or read our stories at Fresh
Accounts.
Brokerage services provided by TD Ameritrade, Inc., member FINRA
(www.FINRA.org) / SIPC (www.SIPC.org).
1 TD Ameritrade Institutional is a division of TD Ameritrade,
Inc., a brokerage subsidiary of TD Ameritrade Holding
Corporation
Source: TD Ameritrade Holding Corporation
BI# 1281111
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version on businesswire.com: https://www.businesswire.com/news/home/20200130005011/en/
Media Contact: Joseph A.
Giannone Communications + Public Affairs T: 201-369-8705
joseph.giannone@tdameritrade.com
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