The broker protocol was created in 2004 to help cut the number of lawsuits and arbitration cases filed by broker-dealers because of advisors changing firms. There were 535 breakaway deals in 2018 - a previous record - and the deals have been increasing since 2017, according to Echelon.Įchelon says fears among advisors at wirehouses that left the Protocol for Broker Recruiting that they would be embroiled in litigation “largely dissipated” over the past two years with “several successful large breakaways that set a powerful precedent for advisors considering a move.” But the company believes “ongoing economic uncertainty” may still drive more breakaway deals “as more advisors seek independence sooner rather than later.” Scroll down for data on the top five winners and top five losers in the breakaway movement last year.Īdvisors are increasingly seeking independent platforms after the expiration of those loans, and 14% - the highest annual percentage so far - expired in 2019, according to Echelon.Įchelon expects the expiration rate of those forgivable loans to slow starting in 2020, making them less of a reason for advisors to jump ship in the coming years. An aging advisor population preparing for liquidity events is also cited as a reason for the rising breakaway trend.
The rest of the top five losers are Morgan Stanley, Merrill Lynch, UBS Financial Services and First Republic.Įchelon attributes the heightened breakaway activity last year to the continued expiration of forgivable loans issued by wirehouses during the height of the 2008-2009 financial crisis to recruit and retain advisors at the time. Wells Fargo Clearing Services, the traditional brokerage channel of Wells Fargo Advisors, was the biggest loser in the breakaway movement last year in terms of AUM lost to departing advisors. The rest of the top five winners are Stifel, Nicolaus & Company, Raymond James Financial Services, Raymond James & Associates and UBS Financial Services. FiNet is the independent brokerage channel of Wells Fargo Advisors. The biggest winner in the breakaway movement in 2019 was Wells Fargo Advisors Financial Network.
UBS Financial Services also landed in both rankings. Wells Fargo units were the biggest winners and losers in the breakaway movement last year. Advisor breakaway activity increased significantly in 2019, rising 22% to a record high of 655 breakaway deals last year, according to a study from Echelon Partners.
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