Have you ever seen your favorite Hollywood star debut in an indie flick? It seems like Wall Street is following suit, as big banks embrace RIAS to make up for the advisers leaving.
According to research firm Cerulli Associates as reported by InvestmentNews, US RIA firms grew from 15,500 to almost 17,000 strong in five years. Advisers are leaving big companies to start firms of their own, where they have more freedom and sometimes, more income.
But big banks aren’t about to let their indie companions eclipse them. Goldman Sachs bought an RIA network, United Capital, for $750M. It was a cash transaction. Wells Fargo now lets employees practice as RIAS. And Merrill Lynch? Well, while there are no immediate plans to go indie, they bought platform Envestnet Tamarac, which is hit amongst RIAs. Perhaps they want to keep their advisers happy with their technology suite, and prevent them from leaving, InvestmentNews points out.
Here’s the thing: being an RIA should mean objectivity, providing clients with independent advice that’s good for them and not working in the greater interest of a large provider. Can RIAs under a big company be indie at all?
We’ll have to watch the premiere.
