The Math Behind the Move to Independence

By Mindy Diamond via

Why so many advisors are going indy, even with stiff competition from hefty brokerage firm transition deals.

I am asked countless times a week by smart and curious advisors about how the economics of going independent compare to the present value of taking a check from a wirehouse or other major brokerage firm (today maxing at 175% cash up front). Figuring that the question is a valid one and that it is on so many people’s minds, here is my answer.

Let’s make some assumptions about the advisor who is beginning to explore his options. He has been with the same wirehouse firm for his whole career; let’s say 20 years at this point, generating around $3mm in annual production, 75% of which is fee-based, and managing just shy of $350mm in assets.

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