Independent broker dealers are offering RIA platforms with more discounted pricing in order to convince their advisors to stay with the home team. They also hope to attract new advisors this way.
The ascendency of the RIA model at the expense of the traditional brokerage is practically a given in this industry, but independent broker/dealers are fighting back. Several of the largest independent broker/dealers (IBDs), including Raymond James, Commonwealth, Securities America and LPL, have rolled out new programs looking to compete with the likes of TD Ameritrade and Schwab to both attract and retain advisors.
They have little choice as the industry evolves. IBDs have seen traditional revenue dry up thanks to continued low interest rates and still-cautious retail investors, while higher technology and compliance costs eat into profits.
Add to that the flow of advisors away from the traditional brokerage model and things are bleak. The RIA ranks are expected to rise 6.3 percent in the next four years while IBD and wirehouse advisors will decline 4.3 percent and 2.5 percent respectively, according to Cerulli Associates. Recent big moves: the Coppell, Texas-based CFO4Life LP recently left LPL Financial and put the majority of their $500 million AUM with TD Ameritrade. In 2011, Brad Griswold left LPL to launch his own $250 million RIA with Schwab, while TD lured five advisors from Commonwealth with a combined $1 billion in assets.