Independent Advisor Headcount Growth Rolls On: Cerulli


By 2027, the RIA channel could control nearly one-third of assets, based on data from Cerulli.

Despite the wirehouses’ best efforts to retain financial advisors, the movement toward independence is stronger than ever. 

The number of financial advisors working at independent RIAs grew 10.6% year over year in 2022, while headcount at hybrid RIAs grew 7.6%, according to the latest data from Cerulli Associates.

This led all other channels in terms of headcount, a trend that has held for a decade. Headcount at independent RIAs grew at an annual compound rate of 5.2% over the past 10 years, while the number of independent firms grew 2.4%. The number of hybrid RIA firms has actually decreased slightly (0.1%) over that same time period, but headcount at hybrid firms has grown 3.5%. 

At the end of 2022, about 78,282 advisors worked at 18,558 retail-focused RIA firms, collectively managing $7.1 trillion in assets. By 2027, the RIA channel could control nearly one-third of assets in the marketplace, said Andrew Blake, an associate director at Cerulli. 

“Although the wirehouse channel dominates industry assets and average advisor productivity, the flexibility and higher payout percentages of independence is appealing to many advisors,” Blake said in a statement. 

Cerulli attributes the productivity of wirehouse advisors to focusing on serving high-net-worth and ultra-high-net-worth investors. Having a higher average level of assets under management per advisor allows the firm to expand support teams, which can be costly and time-consuming for independent firms. 

This could explain why advisors not going independent are increasingly working for the largest broker-dealers. Nearly two-thirds of advisors in the BD channel are working for one of the 25 largest firms. Thanks to ongoing acquisitions, more than a quarter of BD advisors are at one of the five largest firms, Cerulli reported.

Edward Jones leads in advisor headcount with 17,961, according to Cerulli. LPL Financial comes in second with 17,749. 

“BDs will need to continue to leverage the benefits of working under corporate scale, which include access to technology, training, and client resources, to highlight the alluring aspects of affiliation with a major BD,” Blake said. “Otherwise, they risk seeing channel migration trends continue.” 

Cerulli projects that overall industry headcount will remain relatively flat over the next five years. While independent channels will continue to grow market share, challenges such as succession planning could be magnified.

Credit: bakhtiarzein/Adobe Stock


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