Shining a Bright Light on the High Costs of Breaking Away

Note: This article is courtesy of

By Matt Sonnen

Once You Break Free of the Wirehouse, You Need to Run From the Platforms and Aggregators, Too!

There is always a dark side to success. The RIA market has been booming for years, consistently taking assets away from the traditional bank/wirehouse community, and now manages nearly $3 trillion in assets.

As the overall assets under management has risen in the RIA community, a slew of opportunistic middlemen have put up their shingles, offering “platforms” or an “aggregator solution” to help captive advisors break away and remove the operational aspects of the transition to independence – a truly valuable service that is needed by breakaway teams who have never had to manage these critical issues before.

The rub here is that these middlemen are using the lack of experience and knowledge of these advisors against them to extract exorbitant rents.  As a result, the high costs associated with the aggregators and platform providers is limiting and slowing down the breakaway movement, especially for the larger teams – a very unfortunate result for not only those advisors and their clients, but also the industry as a whole.