Big Asset Producers Turn Their Sights To Independent Firms

Posted on June 6th, 2014 at 3:20 PM

From the Desk of Jim Eccleston at Eccleston Law Offices:

As technology and compensation models improve, independent firms are becoming an attractive home for big producers. For the first quarter of 2013, the top five firms which gained the most net assets are Morgan Stanley, Raymond James, Lebenthal Wealth Advisors, Dynasty Financial Partners, and Focus Financial Partners. While Morgan Stanley is a wirehouse, the rest are not. All independent firms brought in $1 billion or more each in net assets.

Why the success? Technology improvements make smaller, independent firms more competitive. For example, a former Credit Suisse Group AG adviser, who managed about $1 billion in assets, decided to affiliate with Dynasty because of the level of support offered by its custodian and service providers.

Similarly, different compensation models have emerged to which make the additional expenses of independence more affordable and more rewarding. For example, hybrid firms offer different levels of ownership in exchange for equity stakes in the firm. This model is popular for many larger teams looking to grow. Those new models allow advisers to not only gain more independence, but also to monetize their business.

The attorneys of Eccleston Law Offices represent investors and advisers nationwide in securities and employment matters. Our attorneys draw on a combined experience of nearly 50 years in delivering the highest quality legal services.

Related Attorneys: James J. Eccleston


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