Indie firms are winning the advisor race. Here's how other firms can catch up

With tens of thousands of financial advisors on the move each year, every wealth management channel should take cues from the independent firms that are attracting them, a new study said.

An estimated 25,443 advisors managing $3.06 trillion in client assets switched firms through recruiting and M&A deals in 2025, according to a report last month by research and consulting firm Cerulli Associates. While most of those advisors stayed in the same industry channel, the rise of registered investment advisory firms and RIA accounts drove the share of wealth management client assets managed under the fiduciary duty to 58% in 2024 from only 40% in 2014. Independent and hybrid RIAs boosted their share of industry assets by six percentage points to 27% over that span. Cerulli projected that independent broker-dealers and hybrid RIAs will gobble up the largest increase in their portion of industry assets from 2025 to 2029. 

While the data simply "crystalizes a lot of what we knew to be true," it also reflects how "independence is a spectrum," said Jason Diamond, the president of advisor recruiting firm Diamond Consultants and the lead author of its report tracking moves each year. 

So, while RIAs and independent advisory firms that work with them as brokerages or in other service capacities are growing rapidly, they face recruiting and retention challenges as well. Besides the advantages of name recognition and scale that keep them in the running among prospective destinations, the largest firms in any channel no longer have as much of an edge, he said. And the biggest RIA aggregators that have expanded so quickly in recent years have been, in some cases, responding to the threat of advisors breaking away for independence by getting "more and more restrictive" in contracts and deal terms designed to retain advisors and assets, Diamond noted.

"You see a little bit of the ugly side of M&A — not just M&A, but also recruiting. Because of how hard it is to find quality talent, firms are going to be increasingly competitive about the talent they do have," Diamond said. He pointed to how common RIA litigation, traditionally associated with wirehouse breakaways, is becoming these days. "What I care more about is, does this become almost a deterrent to movement?" Diamond added. "And I think the answer is, maybe."

READ MORE: Record-breaking RIA growth, in 5 charts

The spigots are open

So far, however, the flow of advisors and assets remains strong across the industry. 

In all, 8.8% of the industry's advisors and 8.5% of its assets changed firms last year, according to Cerulli's estimates. Approximately 60% of the advisors and 58% of the assets that moved to a different wealth management company remained in the same channel, compared to the 39% of advisors and 42% of assets that left one of seven channels for another. Cerulli defined those channels as: wirehouse firms, national and regional brokerages, independent brokerages, hybrid RIAs, independent RIAs, insurer-owned brokerages and retail bank-based brokerages. 

Firms from any channel could benefit in the fight for advisor talent — but they'll need to adapt to the ongoing shift toward RIA accounts and independence, the report said.

"Advisor preferences clearly favor independence," Stephen Caruso, an associate director of wealth management with Cerulli, said in a statement. "The evolution of the RIA channel highlights not only the competitive nature of advisor recruitment, but also the need for firms to proactively adapt their competitive positioning to align with what advisors seek: independence, autonomy, better support systems and the ability to build long-term business value. Firms that treat advisor mobility as an opportunity will be better equipped to emerge as winners in the ongoing realignment."

That's why the independent firms that have been leading that movement have, at the very least, a head start on the competition. Among advisors surveyed by Cerulli, 71% told the firm they would opt for an independent channel if they were planning to go to a new firm in 2024, Caruso noted. Among independent RIAs, 88% of advisors described themselves as likely to stay with their current firm for the next year, with 97% of the group saying they would remain in that channel if they did ever leave. At 6%, that channel had the smallest percentage who said they were undecided, somewhat or very unlikely to stay at the same firm.

READ MORE: What's wrong with the big RIA model, straight from advisors' mouths

Pain points and key drivers

Here are some of the other most interest data points from Cerulli's report:

• Wirehouse advisors most likely to move. Across the board in every channel, 12% of advisors said they were undecided, somewhat or very unlikely to remain with their firm. Those with wirehouses (26%), independent brokerages (16%), insurer-owned brokerages (14%), hybrid RIAs (10%) and national and regional brokerages (7%) ranked from the highest to lowest probability of making a move.
  

• Higher payout is the biggest lure. When asked in 2024 what were the major factors that would lead them to go to an independent firm as a breakaway from an employee channel, "higher payout" (58%), "greater autonomy" (33%), "ability to build financial value in an independent business" (31%) and "elimination of sales quotas" (26%) drew the largest share of votes out of 10 rationales.
  

• Most advisors who moved stayed in same channel. In terms of the estimated advisor moves, 15,412 of them with $1.78 trillion in client assets kept their advisory practices in the same channel of the industry, while 10,031 with $1.29 trillion left for a different one. And that projection involved only advisors with at least three years in the field. A separate but not mutually exclusive group of advisors with almost $3 trillion in client assets retired last year, according to Cerulli's calculations.
  

• Client loss is the biggest worry for breakaways. For potential breakaway advisors considering independent moves, the most prevalent "major concern" out of 12 options was "losing clients during the transition," at 65% among the group. That was followed by startup expenses (38%), taking over more operational tasks (34%), client resistance to leaving a big-name brokerage (34%), greater compliance duties (32%) and the cost of operating the business (30%).
  

• Switching channels can be costly. Those fears about going independent are well-founded. "When advisors change firms from one independent firm to another independent firm, they lose just 12% of assets during the move, the lowest rate of loss experienced by advisors who switch firms," the report said. "However, advisors who move from an employee firm to an independent firm lose 20% of assets and advisors who move from one employee firm to another employee firm lose 34% of assets."
  

• Brokerages projected to lose greatest share of advisors. Nevertheless, the trends point to some winners and losers in the share of advisors and assets across industry channels over a five-year span. From Cerulli's estimates for 2025 to 2029, the wirehouse firms' share of advisors will decrease by 0.9 percentage points to 14% and their portion of assets will drop by 3.3 percentage points to 29.9%. However, the largest losers of advisors will be insurer-owned brokerages (down 1.8 percentage points to 10.1% of the industry) and retail bank-based brokerages (down 1.1 points to 8.2% of the industry). Independent RIAs (up 2.9 percentage points to 20.1% of advisors) will lead the winning channels in terms of headcount, while hybrid RIAs (up 1.8 points to 13% of assets) are poised to gain the biggest increase in assets. "The independent RIA channel is expected to experience significant headcount growth, largely at the expense of the captive B/D channels," the report said.
  

That said, the employee channels of wealth management can alter their businesses in a way that aligns better with all these trends. For instance, they can invest in methods for assisting early-career advisors in a position to inherit client accounts from retiring ones. And rookies with "alarmingly high" attrition rates — to the tune of nine out of 10 first-year practitioners at insurer-owned brokerages leaving the industry within a few years — point to the necessity of better career support in "in an increasingly fluid advisor landscape," the report said. 
"Given these dynamics, captive B/D firms must adopt strategies that improve advisor retention, satisfaction and retirement programs," it said. "First, firms should learn from the independent model by granting advisors greater autonomy wherever they can. Second, firms must address cultural and operational challenges by investing in transparent communication, compensation structures that align with the interests of clients, and back-office support — particularly in channels such as wirehouses in which dissatisfaction is the highest."