RIABiz is reporting on a Tiburon Strategic Advisors report titled “The Independent Reps & Independent Broker/Dealers Market: The 21st Century Model?” The report makes a number of bold predictions including that wirehouses, seeking to stem the tide of breadaway brokers will emerge with their own independent models to retain advisors this year. These “halfway houses” will provide quasi-independence. Chip Roame, Tiburon Managing Director, believes that wirehouses now realize that it is worth offering a higher payout to quasi-independents because it would stem the tide of breakaway brokers.
The article points out that, on the other hand, this concept is not new and that a few year back Bing Waldert, Managing Director of Cerulli Associates thought that the wirehouses were going to launch independent options. Now, however, he thinks wirehouses are not interested in being independent despite the loss in market share. He points out that they have cut costs, have strong financials and that it would be inconsistent with all the time the wirehouses have spent to debunk the myth of advisor independence.