The Mission-Driven Advisor: Why The Exodus from the Wirehouse?

Written by: Jeff Thomas

“Let My People Go”

These are likely the four best-known words from the Book of Exodus uttered from Moses to Pharoah.

Over the last several years, wirehouse headcount has been falling in the single digit percentages, while RIA’s are growing at high single digit percentages [1].

Why the Exodus from the wirehouses for the “Mission-Driven Advisor”?

My definition of a “Mission-Driven Advisor” is one who considers their work a calling, not just a career.

I submit that there are several mega-trends that are contributing to the Exodus:

          Mega-Trend One:  Maturing Industry

          Mega-Trend Two:  Narrative Before Numbers

          Mega-Trend Three:  Technology Leapfrog

          Mega-Trend Four:  Culture


Maturing Industry—The brokerage industry started in the U.S. by selling railroad stocks and bonds that investment bankers produced.  In other words, brokers sold the products the bankers produced.  The industry is still emerging from this legacy.  Firms of the future will embrace fee-based independent advice over commission-based product sales.  If you hired a family office manager for yourself, would you rather pay them a salary or have them receive commissions for the products they buy for you? 

Additionally, firms of the future will create collaborative organizations where teams of specialists work together much like accounting and legal professions (i.e. more mature professional services industries).  RIA’s aren’t burdened by the wirehouses’ legacy product production and compensation structures, so they are better able to capitalize on these trends.


Narrative Before Numbers--Too much time is spent by the wealth management industry on jargon about investments and not enough time is spent on listening and understanding the clients’ past and desires for the future. Only when a client's narrative is put before her numbers can the “Mission-Driven Advisor” truly customize a plan for her.  Organizations like Kingdom Advisors and Family Meridian are growing to support “Mission-Driven Advisors” in having meaningful conversations with clients. 


Technology Leapfrog—Technology is revolutionizing nearly every industry and wealth management is no exception.  Information is now ubiquitous thanks to the internet.  Wirehouses used to have an information advantage.  No longer.  More meaningful conversations as detailed above are now the true value-ads of the “Mission-Driven Advisor”.  Wirehouses used to have technology advantages. No longer.  Thanks to the cloud, powerful software programs are accessible to much smaller firms.  In fact, the wirehouses are limited by having to dumb-down the programs they let their advisors use as they have to manage to the lowest common denominator (i.e. the least experienced advisors of their thousands of advisors).


Culture—Perhaps the most important reason “Mission-Driven Advisors” are drawn to the independent channel is that they have potentially have access to a different corporate culture that supports their calling to help clients reach a better place as it relates to money.  Most wirehouses are public companies that, by definition, are owned by public shareholders that reflect the values of the world at large.  Many independent firms are privately owned which allow them the flexibility to have a different scorecard than public shareholders demand.


The “seas are parting” to create a clear path from wirehouses to independent firms.  The “Mission-Driven Advisor” is especially drawn to the “client-first” trends independent firms are riding.


Over the next several weeks, I will address the most common questions I'm getting from "the Mission-Driven Advisor” who is considering breaking away from a large firm.  


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Jeff Thomas is the Founder/CEO of Archetype Wealth Partners. He has assembled an amazing team to provide an open architecture, fee-only (fiduciary) platform that offers a wide variety of investment choice to clients. Archetype exists to help families thrive across generations.


Disclaimer: Our intent in providing this material is purely for informational purposes, as of the date hereof, and may be subject to change without notice. This article does not intend to constitute accounting, legal, tax, or other professional advice. Visitors and readers should not act upon the content or information found here without first seeking appropriate advice from a trusted accountant, financial planner, lawyer or other professional.

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