Skip to main content

You are here

Advertisement

Is the Hybrid BD Model About to Take Off?

The hybrid model for advisors is growing quickly, especially in the DC market. But will that trend catch on with broker dealers? According to a report in RIABiz, results at Wells Fargo’s independent FiNet indicate that the answer may be yes — although Wells is the only wire house to allow advisors to use its impressive brand as an independent rep. FiNet has grown 61% over the past three years, now comprising 1,210 of the 15,189 advisors within Wells Fargo and boasting the highest assets per advisor among indies. 

So will other wire houses looking to boost revenue — and less willing to pay big recruiting bonuses — follow suit, not only to keep their current advisors from jumping ship but also to recruit from the indies and RIAs who have been picking off their advisors?

Advisors in the DC market basically have three choices:

  • employee based including wire houses and other firms like Raymond James, which also has an independent arm;
  • independent BD; or
  • pure RIA.
There is a growing trend to join a team, which can be either employee-based like CapTrust and Sageview, or independent like Pensionmark — which might in turn clear through a BD. Sageview does this with Cetera and Pensionmark with LPL. 

The idea of joining a national brand while remaining independent might be appealing to some plan advisors and firms looking to offer alternatives to recruits or departing advisors. The FiNet/Wells Fargo success seems to indicate that the BD hybrid model might be viable.

Advertisement