Atomic Updates
Advisor Migration to Independence – Part 2
July 14, 2025
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As a follow up to my recent article documenting the massive wave of advisor migration from wirehouses to independent firms over the last couple of decades (see here: AdvisorTrends), I’d like to explore the reasons for these shifts from an Advisor’s perspective.
In other words, if you look back at the history, why did the founding teams at so many of these world beating RIAs leave their comfortable, extremely well-paid positions at Morgan Stanley, Goldman Sachs, JP Morgan, etc.to start their own businesses.
It can’t be that life was all that bad at these firms, and yet, if one looks at the top RIAs in the industry with an average client size in excess of $10M, nearly 100% of these firms were started by teams that came from one of the top 5 wirehouses.
This exodus, which accelerated after major market disruptions like the Dot Com bust, the 2008 Financial Crisis, the COVID-19 pandemic, and which is only accelerating today, is driven by several powerful forces:
Entrepreneurial Freedom: Advisors are hired into the wirehouses under the promise of being able to build their own businesses, but the reality on the ground often looks quite a bit different. By contrast, Advisors in the RIA channel have autonomy over the management of their client relationships, as well as their broader business practices. Unlike wirehouse employees, independent advisors can build their own firms, set very high service standards (which usually comes at the expense of sales growth, a non-starter in the wirehouse world), and select the technology and investment solutions that best fit their clients’ needs.
Client-Centric Culture: RIAs operate under a fiduciary standard, legally obligating them to act in their clients’ best interests. This is wholly different from the suitability standard that governs wirehouse representatives, and which inherently causes confusion for clients, has ever-present and deep conflicts of interest, and ultimately erodes trust. Unfortunately for the wirehouse employees, clients have gotten wise to the suitability game over the last 10-15 years and they know to ask whether their Advisor ALWAYS has to put their interests ahead of the firm’s interests.
Fiduciary Duty: The RIA model’s fiduciary requirement is increasingly attractive to advisors who want to provide holistic, conflict-free advice. This legal standard has become a differentiator as clients grow more sophisticated and demand transparency.
Compensation Flexibility: Independent advisors can design their own fee structures—often favoring fee-only or fee-based compensation—rather than relying on product commissions or sales quotas imposed by wirehouses.
Open Architecture: Independent RIAs benefit from a rapidly evolving ecosystem of third-party technology providers. Open platforms allow for faster adoption of portfolio management tools, financial planning software, payments and workflow tools like Atomic Insights, among others. These tools enable advisors to deliver a more modern and efficient client experience at scale.
Data Access: Improvements in data sharing and API connectivity at the traditional RIA custodians have leveled the playing field, giving independent advisors access to the same (or better) technology as their wirehouse counterparts, but with greater flexibility and speed.
Personalized Service: Today’s clients expect customized advice, transparent fees, and direct access to their advisors. The independent model, with its emphasis on high touch service and fiduciary duty, is well-positioned to meet these demands.
Generational Wealth Transfer: As trillions of dollars shift to younger generations, these clients are more likely to seek out independent advisors who can offer holistic planning and digital-first solutions.
RIA Aggregators: The independent channel has seen a surge in private equity-backed consolidation, providing advisors with capital, operational support, and succession planning options. This makes the leap to independence less risky and more appealing, especially for teams looking to scale.
Exit Opportunities: Advisors nearing retirement can now sell their practices at attractive valuations, thanks to a robust market for RIA acquisitions.
Bureaucracy and Constraints: Wirehouse advisors often face restrictive compliance policies, limited product shelves, and pressure to cross-sell proprietary products. These constraints can stifle innovation and limit advisors’ ability to serve clients as they see fit.
Brand Fatigue: Some clients perceive wirehouse brands as impersonal or outdated, preferring the boutique, high-touch service offered by independent firms.
The migration from wirehouses to the independent RIA channel is not a fleeting trend—it’s a structural shift driven by advisors’ desire for independence, better technology, fiduciary alignment, and the ability to deliver truly client-centric service. As technology continues to democratize access and clients become more discerning, the independent segment is poised for continued growth and innovation. For advisors, builders and investors alike, the future of wealth management is increasingly independent.
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