The Shifting Landscape: Broker-Dealers vs. Independence 

There is one question that continues to dominate financial industry conversations: Is the broker-dealer/wire house model outdated?

The Rise of Independent Financial Advisors in 2025 

While the traditional broker-dealer structure isn’t extinct, there’s an undeniable shift happening. Many financial advisors are making a move away from the Hybrid dually registered model of a broker dealer and establishing independent Registered Investment Advisory (RIAs) practices outside of the broker dealer structure. This is happening in two main ways which consist of coming under another RIA or establishing their own RIA.

At FocusPoint Solutions, we’ve been helping advisors transition to independence for over 20 years, and the momentum we’re seeing in 2025 is unprecedented. Let’s dive into what’s driving this transformation, backed by the latest industry statistics and trends. 

Industry Growth and Transformation 

The financial advisory industry continues to experience robust growth. According to Mordor Intelligence, the North American financial advisory services market is expected to grow at a Compound Annual Growth Rate (CAGR) of 8.12% to reach $94.41 billion by 2029 (source). Within this expanding market, the independent advisor segment is showing powerful momentum: 

  • The number of SEC-registered investment advisers reached an all-time high of 15,396 in 2023 (source). 
  • These advisers represented more than 56 million clients and managed $128.4 trillion in assets in 2023—a 12.5% growth from 2022. (source) 
  • The industry added 34,984 jobs in 2023, with non-clerical employment surpassing 1 million employees for the first time.(source) 

Why Advisors Are Choosing Independence 

According to the J.D. Power 2024 U.S. Financial Advisor Satisfaction Study, 34% of employee advisors and 41% of independent advisors who are more than two years from retirement report they may not stay with their current firm within the next one to two years (source).

But what’s driving this transition? Our experience working with breakaway advisors highlights several key factors: 

1. Cultural Stability

Financial advisors are increasingly leaving broker-dealers due to the ongoing mergers and acquisitions (M&A) activity, which leads to cultural changes and increased bureaucracy. With a primary focus on profit to satisfy stakeholders, the needs of the advisors—who are accustomed to receiving significant attention—have begun to take a backseat with each new deal. This shift is prompting advisors to question why they shouldn’t simply go independent at this point.

2. Greater Autonomy and Control

Independent advisors become their own boss, free from the restrictions imposed by larger firms’ ideals and missions. 

3. Financial Benefits

While captive broker-dealers typically pay representatives in the 40%-60% range, typical payout tiers for independent broker-dealers may advertise as high as 90% or more. It is essential for an advisor to understand the entire compensation structure, including all fees and revenue streams, to determine their true “net” payout and how much the broker-dealer is truly retaining.

Independent advisors can set their own rates and have a bigger financial stake in their business outcomes.  In addition, most investment product providers now offer a fee-based solution suitable for RIAs.

4. Client-Centric Approach

Independence allows advisors to customize client offerings and have the flexibility to use any products that best serve their clients’ needs.

5. Fiduciary Focus

As an independent RIA, advisors can focus on providing client-centric services without pressure from sales quotas. 

6. Growth Opportunity

Independent advisors can create opportunities for growth by spending more time with clients, nurturing the client relationship, and focusing on growth rather than paperwork. 

The Consolidation Trend: Mergers & Acquisitions in 2024-2025 

The financial advisory industry isn’t just seeing advisors go independent. It’s also experiencing significant consolidation through mergers and acquisitions: 

  • The RIA segment remains particularly active, with 251 deals in 2023 alone (source). 
  • In 2024, there were 334 M&A transactions valued at more than one billion U.S. dollars (source). 
  • Bank mergers and acquisitions have steadily increased through the third quarter of 2024, although at levels below historical norms (source). 

This consolidation is being driven by: 

  • Strategic growth objectives. 
  • The aging advisor population (with over 109,093 advisors planning to retire in the next decade). 
  • Technology and scale advantages. 
  • Private equity interest in the wealth management space. 

How FocusPoint Solutions Supports Transitioning Advisors 

Our comprehensive support services are designed to make this transition as smooth as possible. 

Back-Office Outsourcing

Your dedicated FocusPoint business transition advisors and back/middle office team will handle all new account setup, as well as transfer of cost basis information as applicable. We will also handle all trading on accounts to set them to your models as part of our financial advisor transition services. 

Practice Development

Our practice development program helps you define your ideal client, design your unique message and brand, and create a custom marketing strategy.

Transition Support

We handle client transfer paperwork, set up client households in non-proprietary systems, and guide you through the timeline based on how quickly you want to meet with clients.

Virtual Ensemble®

Our Virtual Ensemble® model allows you to enjoy all the benefits of a larger firm, while keeping your own identity and remaining in control of all decisions relating to your business.

The Future of Financial Advisory 

As we look ahead, several key trends are shaping the future of financial advisory services: 

Technology Integration 

AI-advisors had an estimated $460 billion in assets under management in 2019, with projections to reach $1.2 trillion by 2024 (source). Successfully integrating technology will be crucial for advisors in the years to come. 

Growth Projections

Despite the significant challenges, financial advisors remain optimistic about their future prospects. They anticipate an average annual growth rate of 11.5% over the next year and 12.4% over the following three years (source). 

Value Beyond Asset Allocation  

There’s a growing emphasis on demonstrating value beyond asset allocation, with 59% of advisors citing this as the top metric for future success. This aligns perfectly with our philosophy at FocusPoint Solutions. FocusPoint focuses on the success of our advisors, and our relationships with them. Our comprehensive support team becomes your team, providing you with access to the leverage and scope of a larger firm, and the dedicated, personalized attention you desire and deserve, enabling our advisors to deliver exceptional service to their clients.

Conclusion: Evolution, Not Extinction 

So, is the broker-dealer model outdated? The answer is not yet, although it’s certainly evolving. The data clearly shows significant momentum toward independence, with the financial advisory industry continuing to grow and transform through consolidation, technological integration, and a shift toward client-centric, fiduciary models. 

The future belongs to advisors who can adapt to these changes. By leveraging support services like FocusPoint Solutions, advisors can navigate the complexities of independence while staying focused on what matters most: serving clients exceptionally well. 

To learn more about what this article means to you, what are other options to consider, reach out and contact a member of our team.

Frequently Asked Questions 

According to industry sources, there are approximately 283,000 to 399,640 financial advisors in the U.S., with the U.S. Bureau of Labor Statistics projecting an addition of 50,900 more jobs by 2031. 

According to the J.D. Power 2024 U.S. Financial Advisor Satisfaction Study, 34% of employee advisors and 41% of independent advisors who are more than two years from retirement say they may not stay with their current firm in the next one to two years. 

According to the J.D. Power 2024 U.S. Financial Advisor Satisfaction Study, 34% of employee advisors and 41% of independent advisors who are more than two years from retirement say they may not stay with their current firm in the next one to two years. 

Key factors driving advisors toward independence include greater autonomy and control over their practice, increased earning potential, the ability to provide more customized client services, a focus on fiduciary responsibility, and enhanced growth opportunities. 

The financial advisory services market in the United States was valued at $85.1 billion in 2022 and is projected to grow at a compound annual growth rate (CAGR) of 5.5% from 2023 to 2032. Assets under management in the financial advisory market are projected to reach $62.61 trillion in 2024.

FocusPoint Solutions’ Virtual Ensemble® model enables independent advisors to enjoy the economies of scale and synergy of a traditional ensemble, while maintaining their independence and remaining in control of all decisions relating to their business. It provides advisors with comprehensive back-office support, practice development resources, and technology infrastructure, while allowing them to maintain their unique brand and identity. 

The timeline for transitioning to independence depends on the complexity of your practice and your readiness to discuss the change with clients. FocusPoint Solutions customizes the transition plan based on your specific needs and goals. We typically help advisors complete the process within 3 to 6 months. 

Transitioning advisors face several significant challenges. Beyond navigating regulatory requirements, advisors must manage client transitions, establish operational infrastructure and build their brand. By partnering with FocusPoint Solutions, advisors can help address these challenges by accessing the necessary support and expertise during the transition process. 

Technology is transforming the financial advisory landscape through the use of AI-advisors, AI-powered analytics, enhanced client portals, and integrated back-office systems. Successful advisors are leveraging these technologies to improve client service, streamline operations, and focus on high-value activities. 

When selecting a transition partner, look for a back-office firm that has a proven track record of successfully helping advisors go independent, comprehensive support services that address your specific needs, transparent pricing, and a culture that aligns with your values and vision for your practice. 

Sources 

  1. J.D. Power. (2024, July 10). 2024 U.S. Financial Advisor Satisfaction Study. https://www.jdpower.com/business/press-releases/2024-us-financial-advisor-satisfaction-study 
  1. Mordor Intelligence. (2024). North America Financial Advisory Services Market. https://www.mordorintelligence.com/industry-reports/north-america-financial-advisory-services-market 
  1. Investment Adviser Association. (2024, June 20). Industry Statistics. https://www.investmentadviser.org/industry-snapshots/ 
  1. Alvarez & Marsal. (2024, July 17). M&A Trends in Wealth Management: 2024 & Beyond. https://www.alvarezandmarsal.com/insights/ma-trends-wealth-management-2024-beyond-2 
  1. Statista. (2024). U.S. M&A deals by deal value 2024. https://www.statista.com/statistics/245977/number-of-munda-deals-in-the-united-states/ 
  1. FORVIS Mazars. (2024, November 8). Regional Financial Services Mergers & Acquisitions Updates – Q3 2024. https://www.forvismazars.us/forsights/2024/11/regional-financial-services-mergers-acquisitions-update-summaries 
  1. Cerulli Associates. (2024). The Financial Advisor Industry Has a Headcount Problem. https://www.cerulli.com/press-releases/the-financial-advisor-industry-has-a-headcount-problem 
  1. Natixis Investment Managers. (2024). 2024 Global Survey of Financial Advisors. https://www.im.natixis.com/en-us/insights/investor-sentiment/2024/financial-professionals-report 
  1. Investopedia. (2024). What the Next Decade Holds for Financial Advisors. https://www.investopedia.com/articles/financial-advisors/021216/what-next-decade-holds-financial-advisors.asp 
  1. Investment Advisor. (2024) Investment Adviser Industry Snapshot 2024. https://www.investmentadviser.org/wp-content/uploads/2024/06/Snapshot2024_FINAL.pdf 

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