TD Ameritrade Institutional attracted 348 breakaway brokers in 2011, a nearly 20 percent increase from the previous fiscal year. The increase in breakaway brokers moving from full-commission firms to TD Ameritrade Institutional is driven by a continuing trend of investors choosing to work with independent registered investment advisers and brokers seeking the stability of the RIA channel amid regulatory uncertainty.
"According to a recent survey released by TD Ameritrade Institutional, the top reason investors choose to work with an RIA is that, as fiduciaries, RIAs are required to offer advice that is in the best interest of their clients," says Tom Nally, managing director of institutional sales for TD Ameritrade International. "The survey results support what we see as a long-term trend of investors seeking objective advice. Brokers recognize the movement and are following investors to the independent RIA channel."
TD Ameritrade's Advisor Index Survey found RIAs continue to grow and take market share from traditional full-commission firms. The majority of new RIA assets, 55 percent, are coming from traditional full-commission firms. Nine in 10 RIAs reported an increase in clients or that their client base has remained steady over the past six months.
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RIAs who were surveyed reported they had an average revenue growth rate of 18 percent and they were adding clients at an average rate of 13 percent over the past six months. The report also found job satisfaction is high, with eight in 10 RIAs saying they are satisfied with their careers.
"Just a few years ago brokers were hesitant to go independent amid major market swings and economic uncertainty. They wanted to avoid putting further stress on client relationships during the downturn," Nally says. "Investors are more conditioned today to deal with market fluctuations. Volatility is the new norm, in the eyes of some investors, and has less of an impact on the advisor-client relationship than it did in 2008."
Another significant trend supporting adviser migration is the option of joining an existing RIA. Breakaway brokers looking for the benefits of independence but want to join or "tuck in" to an established firm represent a growth opportunity for RIAs.
TD Ameritrade Institutional provides comprehensive brokerage and custody services to more than 4,000 fee-based, independent registered investment advisors and their clients.
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