Wirehouses to continue bleeding advisors in 2024

investmentnews.com:

This will be another year of transition at the four wirehouses – Merrill Lynch, Morgan Stanley, Wells Fargo Advisors, and UBS – as each seeks to find stability after last year’s significant changes.  

The greatest instability each of the four firms faces is the continued diaspora of its financial advisors, the most productive and profitable in the wealth management industry. Financial advisors at the four large firms routinely generate more than $1 million on average in fee and commission revenue annually and work with the wealthiest group of clients.  

But they continue to leave the wirehouse firms, which spend handsomely on marketing to new clients, to work at registered investment advisors or independent broker-dealers, where financial advisors take home a much bigger chunk of the revenues they produce but have to pay for their own offices and other expenses.  

According to InvestmentNews research, the RIA channel saw a net gain of 856 financial advisors over the first nine months of last year, with independent broker-dealers posting a net gain of 685.  

Wirehouses, meanwhile, continue to bleed financial advisors, with a net decrease of 612 over that same period. It’s been that way since the credit crisis of 2008; the Big Four have seen a steady drip of financial advisors leaving, helping fuel the boom in the RIA market.  

2024 will be little different, particularly in the wake of the series of changes last year.  

“The wirehouses are dying, but we just don’t have a date yet to put on the tombstone,” said Danny Sarch, an industry recruiter. “One challenge is their financial advisors are leaving to other channels, and another is figuring out how to replace them.”  

“In general, the executives at the top of these firms