PLANADVISER - January/February 2018 - 15

More Advisers Want to Go It Alone
Many motives behind the switch to RIA
AS the number of independent registered
investment advisers (RIAs)
continues to rise, a recent study looked
into the motives behind why brokerage
firm advisers seek to strike out on
their own.
In its recent survey, performed
this past September, TD Ameritrade
Institutional found that, of the 134
brokers responding, nearly half said
their interest in breaking away mainly
concerns the future state of the broker/
dealer (B/D) industry. Forty-six percent
believe the brokerage industry is " on
the way to significant deterioration. "
As to what they consider the industry's
major challenges, 85% pointed
to shifting regulations, including the
uncertain
regulatory
environment,
as the principal challenge. In addition,
54% cited changing compensation
structures, and 46% said damaged
public trust and reputation.
Another factor in their decision
to stay or go is the Department of
Labor (DOL) fiduciary rule, with 55%
of respondents waiting to see the full
impact of the rule before deciding
whether to go independent. On the
other side of the spectrum, 26% are
considering breaking away to independence
sooner, while 14% report the rule
has had no impact on their decision.
Other reasons for leaving include
the feeling of greater independence
in decisionmaking, as 34% cited this
authority as a motive. The survey
shows that these advisers-or " breakaways " -widely
believe independence
may lead to more income and better
control over their career.
For those on the fence, speaking
with an independent RIA who left a
firm to practice on his own is a strong
motivator, the study reports. Fifty-five
percent of respondents have interacted
with others who made the move
to independence, and 57% of them
became more motived to leave upon
hearing advice about how to do it.
However, while some seek indepenWhy
Brokerage Firm Advisers Are Moving On
85% say uncertain regulations are challenging
55% are dissatisfied with the corporate culture
54% are dissatisfied with career opportunities
54% say compensation structures are changing
46% believe the brokerage industry is deteriorating
46% say public trust and reputation are damaged
34% want more independence in decisionmaking
Source: TD Ameritrade Institutional, 2017 Break Away to Independence Survey
dence to grow income or gain ownership,
others look for the switch to remove
them from their current company's
culture. In fact, 55% said their firm's
culture was a strong source of dissatisfaction,
and 54% were unhappy with
TALKING POINTS
Price to Pay
The average couple making
$30,000 a year together and
each contributing 5% to a
401(k) would pay $154,794 in
fees over their careers. For a
couple making $90,000, that
would be $277,000 in fees.
Source: America's Best 401k
$30,000
income
$154,794
in fees
$90,000
income
$277,000
in fees
Lessened Awareness
Plan sponsors who do not
think they are a fiduciary.
30%
Source: AllianceBernstein
2011
49%
37%
2014
2017
the firm's
leadership/strategic direction.
Another 54% were displeased with
career opportunities, and 51% were
unhappy with the compensation. Only
12% were satisfied with their current
employer. -Amanda Umpierrez
planadviser.com january-february 2018 | 15
http://www.planadviser.com
PLANADVISER - January/February 2018

Table of Contents for the Digital Edition of PLANADVISER - January/February 2018
