Fidelity Investments reported it helped 146 individual brokers and teams managing $12 billion in assets transition to a range of independent business models last year.
Of this group, nearly 45% started either a registered investment advisory firm or an independent broker-dealer, while the remaining 55% joined an existing RIA or broker-dealer on Fidelity’s platform.
The Boston-based company announced Thursday that the average assets per breakaway last year were approximately $83 million, a nearly 50% increase from 2009. Of the 146 breakaways, 22 had assets in excess of $250 million, including Sapient Private Wealth Management, an affiliate of the Focus Financial Partners Connections program, and U.S. Capital Advisors, a new independent broker-dealer that National Financial, Fidelity’s clearing arm, supported as it was established.
“We believe the shift toward independence is here to stay,” said Sanjiv Mirchandani, National Financial’s president. “In addition to brokers continuing to start and join RIAs, we also are seeing independent broker-dealers successfully attract breakaways. These firms can be appealing to many brokers as they often support both fee and commission business, while also helping to alleviate some of the regulatory burden.”
Michael R. Durbin, the president of Fidelity Institutional Wealth Services, said though the number of brokers going independent has “normalized to pre-crisis levels,” Fidelity has seen an increase in the number of large teams with larger books of business making the transition.
“Our pipeline of breakaways managing over $250 million is as strong as ever and we only expect it to grow as more brokers explore their expanding options for independence,” Durbin said.
Fidelity isn't alone. Schwab has also seen stready growth in its breakaway brokers after a spike in team numbers in 2009,.
In 2010, Schwab had 163 total teams that went independent with Schwab representing $12.6 billion in assets. According to the company, 36% of advisors going independent with Schwab in 2010 joined existing RIA firms and independent broker dealer channel acquisition rose 45% from 2009.
The average team that went independent with Schwab in 2010 represented $75 million in assets under management And Schwab had some large teams in 2010 also – three had $750 million or more in assets under management.
