Seventy-six percent of investment advisors who recently shifted to an independent business model are better off financially, a study by Fidelity Investments found.
Within that 76%, 64% were better off within six months of the move, the survey found.
The study is one of the first formal attempts to examine the transition process, Fidelity said.
The company wanted to "survey those who have made a move to independence over the last five years, explore their experiences, thought processes, how they experienced the transition itself," said Michael R. Durbin, president of Fidelity Institutional Wealth Services, Fidelity's registered investment advisor custody unit.
Fidelity also wanted to answer a broader question, Durbin said: How have the advisors done in independence?
More than half (54%) of those who made the leap to independence did so of their own accord, without being influenced by others. Eighty percent made the switch on their own and the rest moved as part of a team.
Advisors who went independent didn't lose many clients, the study found. About 86% of the newly independent advisors said all or most of their clients moved with them. "One of the most rewarding parts of our transition to independence was the reaction from our clients," said Greg Erwin, co-founder and partner of Sapient Private Wealth Management.
Fidelity and Cogent Research surveyed 173 advisors in September and October.
Moving to an independent business model was defined as joining or starting an independent broker-dealer, joining an existing RIA firm, starting an RIA or joining or founding a corporate RIA arm of a broker-dealer firm.
The minimum book of business for advisors was $10 million in assets under management. The study did not identify Fidelity as the sponsor.
