The Great Wealth Management Migration And Why Advisors Are Leaving Broker-Dealers for RIAs Part 2 of 5: The Numbers Don’t Lie — A Historical Look at the Breakaway Trend
It’s clear qualitatively why many advisors are moving to the RIA channel, but what do the hard numbers show? In this section, we provide a data-driven overview of the advisor transition trend over the past decade. The statistics confirm a significant and ongoing shift of financial advisors and assets away from wirehouse and broker-dealer firms into independent RIA models. We’ll highlight headcount changes, asset movements, and key inflection points that illustrate this “breakaway” phenomenon.
- Net Advisor Headcount Trends: Year after year, the big four wirehouses (Merrill Lynch, Morgan Stanley, UBS, and Wells Fargo) have been experiencing net losses of advisors, while independent channels have net gains. For example, in the first nine months of 2023, the RIA channel had a net increase of +856 advisors, and independent broker-dealer (IBD) firms gained about +685 – whereas the wirehouses together saw a net decrease of –612 advisors over that same period. This pattern is not new. Bruce Kelly of InvestmentNews notes that since the 2008 financial crisis, the wirehouses have seen a “steady drip” of advisors leaving annually, fueling the boom in the RIA market. The wirehouse advisor force has been shrinking slowly but steadily. For instance, Wells Fargo Advisors reported about 12,000 advisors at the end of 2022, down from ~15,000 in 2016. During that time, many of those departing brokers joined independent firms or started their own RIAs. The overall number of financial advisors in the U.S. has been relatively flat (growing only ~0.2% per year over the last decade, due to retirements balancing out new entrants), so the shifts in where advisors practice are largely re-distributions rather than new expansion. And that redistribution has favored independence: Cerulli Associates finds that independent RIA channels have led the industry in headcount growth, averaging about +5.1% annual growth in number of advisors over the past 10 years, while wirehouse headcount has been declining around –1% per year in that span. Simply put, almost all the net new advisors (and many experienced advisors) are ending up in the RIA/hybrid RIA space, and the traditional brokerage world is contracting. [investmentnews.com][investmentnews.com], [investmentnews.com][fa-mag.com], [fa-mag.com]
- Market Share of Assets Shifting: Along with headcount, the market share of client assets managed by different channels has shifted dramatically. A decade ago, wirehouses controlled the largest share of U.S. investable assets. But their dominance has eroded as assets have flowed outward. By 2022, wirehouse firms were estimated to hold only about 29–33% of retail client assets, down from ~40% in 2010. Cerulli projects that by 2027, independent RIAs and hybrid RIAs combined will control about one-third of client assets – roughly on par with or surpassing the wirehouse share. In 2022 alone, the wirehouse channel lost over $320 billion in client assets to other channels (through departing advisors and clients), according to an analysis by WealthManagement.com. Meanwhile, independent RIAs gained the most advisors (nearly +850 net in 2022) and hybrid RIAs gained the most assets (over $140 billion) that year. Large independent advisory firms have been aggressively recruiting wirehouse teams managing billions in assets, and those assets tend to follow the advisors. As another data point, in 2023 Morgan Stanley’s CEO noted that the wirehouse “competitive attrition” had fallen in recent years – but even he acknowledged their market share (by revenue) had dropped to ~37% and was likely to fall to ~25% in coming years as independents rise. Cerulli’s 2023 report underscores this: it found independent and hybrid RIAs were the fastest-growing in assets, with independent RIAs’ AUM growing ~11.2% annually from 2018–2023 (to $4.9 trillion) and hybrids growing ~12.9% annually (to $3.5T), outpacing wirehouses’ ~8.6% annual growth (to $10.5T) in that period. Even though wirehouses still manage a lot of money (they have the highest average assets per advisor), the growth trajectory favors the independent side. In short, client dollars have been moving to independent firms, mirroring the advisor movement. [wealthmanagement.com], [wealthmanagement.com][wealthmanagement.com][fa-mag.com], [fa-mag.com]
- Inflection Points – 2008 Crisis and After: Historically, very few advisors left the big wirehouses; the model was considered too lucrative to abandon. The first big inflection point was the 2008–2009 financial crisis. The crisis (and subsequent scandals like Bernie Madoff and bank account fraud issues at Wells Fargo in 2016) shook the trust some advisors had in large institutions. Notably, after the crisis, Wall Street firms like Merrill Lynch were acquired by banks (BofA), and many veteran Merrill advisors were not happy becoming bank employees. The years immediately after 2008 saw the beginning of the breakaway trend: advisors who might never have imagined leaving a wirehouse started exploring independence. Industry recruiter Danny Sarch said of the wirehouses, “They are dying but we just don’t have a date for the tombstone”, pointing to advisor losses since 2008 and the challenge they face replacing that talent. While “dying” is hyperbole, it captures the sentiment of a slow decline. Another inflection was around 2016, when the Department of Labor’s proposed fiduciary rule (though later vacated) prompted discussions about the future of commission brokerage. Around that time and into 2018, firms like Dynasty Financial Partners and Hightower Advisors – which provide infrastructure for breakaways – grew rapidly, making it easier for big teams to transition. By 2020–2021, the momentum had built significantly: in 2021, a record number of advisors went indie, buoyed by factors like the COVID-19 pandemic (which proved advisors could serve clients remotely and gave some the final push to make a change). AdvisorHub reported that in 2021 alone, the number of SEC-registered RIA firms jumped by 3,280 (a huge annual increase), and credit this “year of transition” to both pull factors (e.g., the rise of the fiduciary RIA model) and push factors (wirehouse grid changes and cultural missteps). The introduction of the SEC’s Marketing Rule in 2021 (effective 2022), which allows RIAs to use testimonials and more modern advertising, might also have indirectly made the RIA model more attractive relative to FINRA-regulated firms (since brokers still can’t use testimonials). Additionally, Regulation Best Interest (2020) raised standards for brokers marginally, but many advisors felt it still wasn’t as robust as being a full fiduciary, so some chose to go RIA to differentiate themselves. [investmentnews.com][advisorhub.com], [advisorhub.com][kitces.com], [kitces.com]
- Current Pace and Future Outlook: The most recent data (2022–2025) continues to show the independent channels on the ascent. In 2022, wirehouses saw a net loss of 4% of advisors (and that’s after recruiting some from each other – gross losses were higher), whereas independent BDs and RIAs saw net growth in advisor count. And it’s not just smaller producers leaving; many high-revenue teams have broken away. For example, in early 2023 and 2024, there were multiple headlines of billion-dollar AUM teams leaving Merrill and Morgan for independent firms. This has a multiplier effect on assets moving. Financial Advisor magazine reported that 40% of all advisor-managed assets could transition over the next 10 years, much of that due to retirements but also advisors shifting to new models. If a significant portion of those retiring advisors sell or transition their practices to independent firms (rather than within wirehouses), the market share shift could accelerate. It’s also worth noting that client awareness and acceptance of independent advisors has grown. Ten or fifteen years ago, a client might have hesitated if their advisor left a big brand to hang a shingle. Today, clients often understand that a move to independence may benefit them (fee transparency, fewer conflicts). A study by 3XEquity found that when advisors do break away, most successfully transfer at least 85% of client assets to their new firm. That high retention rate (<15% attrition) indicates that the feared hurdle of losing clients is not as large as many wirehouse advisors once thought – meaning more advisors have the confidence to make the jump, further feeding the trend. [investmentnews.com][advisorhub.com], [advisorhub.com]
- New Models: Aggregators and Supported Independence: A development in the past decade that has facilitated the breakaway trend is the emergence of RIA aggregators and platforms that offer varying degrees of support. This gives advisors multiple pathways to independence. Some launch standalone RIAs from scratch; others join an existing RIA as an employee or partner (sometimes called a “tuck-in”); others use middle-ground models where they own their RIA but outsource infrastructure to a platform provider (like Dynasty). According to Cerulli, these models have lowered barriers and encouraged advisors who might not have left to do so. Financial Advisor magazine in 2025 noted the “explosion” of the supported RIA model, where advisors get the benefits of independence plus the support of a larger platform – making independence more accessible to those who aren’t DIY entrepreneurs. As a result, the breakaway movement now includes not only the most entrepreneurial advisors but also those who simply want a better deal and more freedom but appreciate having a platform. This broadens the pool of potential breakaways, suggesting the trend has room to continue. [fa-mag.com], [fa-mag.com]
To sum up the numbers: wirehouse and traditional broker-dealer channels are shrinking in headcount and relative assets, while independent RIA channels are rapidly expanding. The shift became noticeable in the early 2010s and has accelerated through the 2020s. By all indications (analyst forecasts, channel pipeline reports), this is a lasting trend. As Mindy Diamond, an industry consultant, wrote, “It’s an awesome time to be a financial advisor because you have more choices than ever. The movement we’re seeing is a reflection of that choice: advisors going where they feel they can best serve clients and grow their business” (paraphrasing sentiments from industry experts). The data “doesn’t lie” – advisors are voting with their feet, and the independent model is winning a significant share of the talent and assets. [wealthmanagement.com]
References :
- Kelly, B. (2024, January 16). Wirehouses to continue bleeding advisors in 2024. InvestmentNews. Retrieved from https://www.investmentnews.com/wirehouses-to-continue-bleeding-advisors-in-2024-248048 [investmentnews.com], [investmentnews.com]
- Reed, J. L. (2025, March 11). RIA Head-Count Growth Fastest In Wealth Management Industry, Cerulli Says. Financial Advisor Magazine. Retrieved from https://www.fa-mag.com/news/cerulli-finds-advisor-headcount-nearly-flat-for-a-decade-81680.html [fa-mag.com], [fa-mag.com]
- Hibbs, A. (2023, September 1). Breaking Away to an RIA: Opportunities and Obstacles. WealthManagement.com. Retrieved from https://www.wealthmanagement.com/ria-news/breaking-away-ria-opportunities-and-obstacles [wealthmanagement.com], [wealthmanagement.com]
- AdvisorHub. (2022, March 25). A Year in Transition. AdvisorHub. Retrieved from https://www.advisorhub.com/resources/a-year-in-transition/ [advisorhub.com], [advisorhub.com]
- Cerulli Associates. (2023, October 30). Independent and Hybrid RIAs Lead in Advisor Headcount Growth [Press release]. Retrieved from https://www.cerulli.com (summary via FA Mag and Institutional Investor) [fa-mag.com], [fa-mag.com]
- Diamond, L. (2024, April 4). Is The End Near at the Wirehouses? Financial Advisor Magazine. Retrieved from https://www.fa-mag.com/news/is-the-end-near-at-the-wirehouses-72112.html (discusses market share and attrition trends) [wealthmanagement.com]