In a year that saw roller-coaster market moves, the nation's top custodians seemed to do all right in their efforts to lure new assets and advisors to their platforms. All four major custodians logged growth in breakaways in 2011, although some firms have gotten shy about sharing details, and apples-to-apples comparisons are tricky.
Charles Schwab continues to dominate the RIA custodian market even though the number of breakaways it added to its platform was largely flat year over year. Tim Oden, senior managing director for business development, said a slow fourth quarter dampened overall growth for the year; the first three quarters were stronger. Oden expects more wirehouse advisors to make the switch to independent firms starting in March, when a large tranche of retention bonuses begins to sunset.
Meanwhile, Pershing Advisor Solutions says average assets per breakaway team joining its platform more than doubled last year, while TD Ameritrade saw the number of breakaway advisors coming on board jump by 20 percent for their fiscal year ending Sept. 30. (The last three quarters of calendar 2011 saw a 14 percent increase, says Tom Nally, TDA's new head of Institutional.) Nally says he expects TDA's share of the breakaway market to grow as more advisors embrace the RIA channel; Pershing Chief Executive Mark Tibergien says advisors with higher AUM are looking for broader service offerings — “We are finding that advisors who cross $500 million of assets often feel they've outgrown their current provider.”