Brokers who join an independent registered investment advisory firm, or start their own, almost always say they chose to do so because it was the best thing for their clients. That mantra might be true, but more control and better compensation are the primary drivers, according to a recent survey.
The top reasons brokers said they want to go independent were "more control over my business" and "higher compensation," according to TD Ameritrade Institutional's 2019 Breakaway To Independence Survey. Only 15% of more than 400 respondents said their "reason to break away is not financial."
Small percentages of brokers said a "better quality of life," the "freedom to work with clients how I want" and "freedom to select the investments that I believe are best for my clients" were the top reason they planned to leave their employer.
To be sure, seeking better compensation and trying to better serve clients don't preclude one other. It's hard not to rank compensation as a top reason, if it's lucrative–66% of brokers said they expect their payout to be better at an RIA than their current firm. Another 28% said they expect their payout will be about the same.
Most survey respondents (65%) also indicated regulatory pressure on the brokerage business was the top challenge their firm faced.