Channeling Mark Twain, former Merrill Lynch and Smith Barney boss Sallie Krawcheck told the MarketCounsel Summit for independent advisors that the demise of the wirehouses is greatly exaggerated.
While wirehouses bled HNW assets after the Great Recession — going from a 53% market share to 42% in 2011 — the bleeding has stopped, according to Cerulli. And though the hybrid model is growing faster than any other, wirehouses are adapting, allowing a subset of their reps to be fee-based. Some, including Wells Fargo and Raymond James, allow advisors to choose between an independent model and a captive one. Wirehouses have 159% more assets than the average advisor, and they have successfully created models to focus their reps on higher-net-worth clients.
While Krawcheck was at Merrill, she claimed that they lost only 37 FAs in 2009 while picking up 26 advisors from independent BDs. Of course, those were the days of big retention packages and recruiting bonuses.