There appears to be an unstoppable trend of advisors and teams adopting more independent options. The author of this brief article considers the main issues.
Amid frequent refrains of how the average age of wealth
advisors is rising – in the higher 50s – and our own regular
coverage of industry M&A – it is easy to see why the
management of future and present talent is a hot topic. (We
intend to look at this space in even more detail this year –
please see our
forward features schedule.)
To take an early look at the movement of advisors, why they
are moving and what the issues are, please read this article from
Jordan Raniszeski (pictured), who is senior managing partner,
Carnegie
Private Wealth. The customary editorial disclaimers apply to
views of guest writers. Please email the FWR editorial team
[email protected]
and [email protected])
if you want to respond. (More detail on the writer below this
article.)
Gone are the days when financial advisors primarily changed firms
during market downturns or in pursuit of bigger upfront paydays.
Today”s wealth management landscape is witnessing a fundamental
shift in how and why advisors choose to make transitions, with
moves increasingly driven by long-term strategic considerations
rather than market cycles.
During my formative years as a financial advisor during the
2007-08 Great Financial Crisis, I witnessed a wave of advisors
changing firms. Many left because their firms were bought or
merged, facing uncertain futures. Others strategically timed
their departures, believing that clients would be more likely to
follow them when their former firm was struggling. This thinking
made sense in the context of the time, but the industry has
evolved significantly since then.
Some of this evolution stems from the remarkable market strength
over the past 15 years. Advisors waiting for a protracted
downturn to make their move would have been waiting a very long
time. However, the more profound change lies in how advisors view
the financial considerations of transitioning.
The new economics of transitions
While 78 per cent of advisors who switch still cite compensation
as a primary motivator, their focus has shifted dramatically.
When I started in the industry, conversations centered almost
exclusively on upfront payouts – which firms were
offering the biggest immediate checks. Today, that calculus has
fundamentally changed with the industry’s shift toward
independence and advisors’ growing understanding of their
practices’ true market value.
Louis Diamond of Diamond Consultants describes this new mindset
as “Career Enterprise Value” thinking. Advisors now ask
themselves: How can I maximize my career’s total compensation
value when considering upfront money, ongoing payout, growth
potential, and the terminal value of my book or equity stake at
retirement? This shift is particularly significant given the
entrance of private equity as a potential exit strategy.
The rise of team transitions
Perhaps most striking about current transition trends is the
movement of entire advisory teams. These coordinated moves
reflect a deeper focus on infrastructure and capabilities rather
than individual opportunities. Teams are increasingly
prioritizing:
— Advanced technology platforms that enhance client service
capabilities
— Greater autonomy in shaping the client experience
— Customized transition and ongoing support
— Clear succession planning pathways for the next
generation
My firm, Carnegie Private Wealth, exemplifies this trend. When
our team, managing over $1 billion in client assets at a large
bank brokerage, began exploring options, we prioritized complete
control over our technology stack, freedom in client
communications, and the ability to grow our team in ways that
made financial sense for everyone.
The numbers tell the story
The industry data supports this shift in priorities. Advisor
headcount at RIAs and independent brokerage firms has risen by
8.6 per cent over the last decade, while traditional wirehouses
have seen a 10 per cent decline. This trend coincides with what
Michael Kitces refers to as the evolution from “Financial
Advisors” to “Financial Advisors” – a shift from sales-focused
professionals to highly credentialed experts providing
comprehensive guidance.
What this means for clients
For clients, this evolution in advisor transitions presents both
opportunities and considerations. While not every advisor changes
firms for the right reasons, sophisticated team moves typically
reflect careful due diligence and consensus-building. Teams
understand that maximizing enterprise value requires creating
enhanced client experience.
These considerations almost universally push teams toward more
independent options, whether that’s an independent broker-dealer
like LPL Financial (which acquired one out of every four
transitioning advisors last year) or a fully independent RIA with
various custodial support options.
Looking ahead
Industry experts predict this trend will continue. Cerulli
Associates estimates that by 2027, 31.2 per cent of market share
will be controlled by independent firms. While traditional
wirehouses remain valuable for certain advisors, particularly
those still building their books or who thrive in structured
environments, the scales increasingly tilt toward independence
for established teams focused on long-term enterprise value.
This evolution reflects a maturing industry increasingly focused
on long-term sustainability rather than short-term gains. The
shift away from short-term moves driven purely by financial gain
represents better alignment between advisor and client interests
– a positive development for all involved in the wealth
management industry.
About the author
Jordan Raniszeski has been serving clients in the financial
services industry for 21 years and has been a Certified Financial
Planner since 2004. He received his bachelor’s in business
administration with honors from the University of Notre Dame. He
has become an advocate for many local charitable
organizations since moving to Charlotte in 2002.
