Large percentages of financial advisors recruited to independent broker-dealers (IBD) are as likely to come from the insurance distribution channel as they are from big wirehouses, a financial industry expert said.
IBDs Kestra Financial and ING Financial Partners each recruit about 30 percent of their advisors from the insurance channel, said Chip Roame, managing partner of Tiburon Strategic Advisors, a market research firm.
IBDs Cambridge Investment Research, Sigma Financial and Signator Investors each recruit between 23 and 27 percent of their financial advisors from the insurance channel, according to Tiburon.
Headlines often announce the departure of large advisors with hundreds of millions of dollars under management from one wirehouse to another or from one wirehouse to an IBD. But a deeper dive into the numbers reveals many advisors coming from the insurance industry as well.
“Are we sure we’re talking about a bunch of people leaving the wirehouses or are we talking about people leaving the captive insurance environment,” Roame asked.
Wells Fargo Advisor Network, Wells Fargo’s IBD, recruits about 65 percent of its advisors from other wirehouses – Morgan Stanley, Merrill Lynch and UBS – but after that the percentage of advisors that come to IBDs from large wirehouses drops off.
Among other leading IBDs, Raymond James Financial Services gathers about 31 percent of its financial advisors from wirehouses and LPL Financial about 26 percent, Tiburon research found.
Commonwealth Financial Network only recruits about 20 percent of its advisors from wirehouses, the research found.
Last year, there were an estimated 76,000 financial advisors working in insurance agencies, brokers and other insurance producer groups.
By comparsion, there were an estimated 85,000 advisors working for full-serve brokerage firms, Tiburon said.
The independent advisor channel counts about 126,000 advisors, retail banks about 12,000 and high-net-worth private client channels about 1,000 advisors.
There are about 300,000 advisors working across the five channels.
InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected]