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Why Fidelity Insists More FAs Are Going Indie

By Alex Padalka April 10, 2018

More than half of financial advisors have thought about switching firms in recent years, while the independent channel’s share of those who do leave their firms is growing, according to a recent Fidelity survey.

Fifty-six percent of advisors have considered leaving their firms in the past five years and 23% have made the move in that time, according to the survey of around 500 advisors conducted in September and February by Fidelity Clearing & Custody Solutions. And 92% of those who’ve switched are happy they’ve done so, according to the survey.

Meanwhile, more advisors who leave their firms are heading to RIAs and independent broker-dealers. While 50% of advisors who moved went to the independent channel, according to Fidelity’s 2015 survey, 64% of advisors went indie according to the most recent survey.

How advisors decide to leave their firms is also changing. While advisors’ peers were identified by 50% of those who move as having influenced their decision, 63% said peers helped them make the decision in 2017, Fidelity found.

Advisors are also taking more assets with them than they did five years prior. While median assets transferred in Fidelity’s 2012 survey were $37.5 million, in 2017 that figure doubled to $75 million.

And recent withdrawals from the Broker Protocol aren’t deterring most advisors from switching firms. The majority of advisors who recently moved or are thinking about moving say the protocol exits would have made just a moderate influence or no influence on their decision, Fidelity found. Nonetheless, three in 10 advisors feel the withdrawals will have a long-term negative impact on advisors switching firms, according to the survey.