Custodial firms have been on the front lines of the breakaway broker trend.

In the last year, TD Ameritrade Institutional, Fidelity Investments, Schwab Advisor Services, a division of Charles Schwab [SCHW] and Pershing, a division of Bank of New York Mellon [BK], have all ramped up services to help wirehouse brokers strike out on their own or join existing firms. 

At TD Ameritrade, the efforts paid off with a record-setting 212 brokers who joined firms that use them as their custodian, the company announced Wednesday. That number represents a 44% increase from the first three quarters of last year.

It is not easy for any wirehouse broker to go independent, so a bit of a horserace has broken out among custodians to serve those professionals, says Alois Pirker, director of wealth management research at Aite Group.

“Custodians realize they are not only responsible for custodying,” Pirker said. “The more services they can offer, the more assets they can receive. What is out of scope is constantly shifting and moving upwards.”

“The fee-based fiduciary business model of independent registered investment advisors is becoming more attractive to brokers who are tied to legacy technology, proprietary products and sales-driven cultures,” said Tom Bradley, president of TD Ameritrade Institutional.

That is ultimately what attracted Ron Wyatt to JFS Wealth Advisors in Hermitage, Pa. Wyatt had spent 16 years doling out financial advice as a traditional broker at the firm A.G. Edwards, which later became Wells Fargo Advisors.

In September, he became fed up with the notoriety that kept sticking to firms like his, and finally decided to join JFS Wealth Advisors, a registered independent advisory firm in Hermitage, Pa., with $800 million in assets under management.  

This decision was three years in the making, not a knee-jerk reaction to the state of the wirehouse channels. JFS Wealth Advisors had been aware of his longstanding reputation in the Pittsburgh area for taking a fiduciary approach to managing his clients’ finances, according to Stephanie Rossi, managing principal of JFS Wealth Advisors headquarters in Hermitage.

“Many brokers will put their financial interests ahead of the clients’ interests,” she said. “He never did that as a broker. He believed the same things we did, in putting the fiduciary responsibility first.”