In a year of substantial growth for the independent brokerage channel of wealth management, these 10 firms raked in expansion that surpassed their peers.
Kingswood Capital Partners, Arkadios Capital and Principal Securities topped the rankings of the independent brokerages in Financial Planning’s annual IBD Elite study with the largest jumps in revenue for 2024.
Rising asset values, elevated interest rates and M&A transactions boosted the channel’s top line last year, with a median 17% hike in annual revenue across the 38 participating firms and a combined 15% bump to more than $50 billion in collective revenue for 2024. The perennial No. 1 firm in the channel, LPL Financial, also made the group of the fastest growing firms after it closed the mega-acquisition of Atria Wealth Solutions last year. Earlier this month, LPL completed another giant deal to purchase Commonwealth Financial Network for $2.7 billion.
Consolidation is enabling a lot of the largest firms to get even bigger, but midsize firms have also displayed enlarged footprints of their own. For instance, Arkadios unveiled an incoming team this week that had managed $2 billion at Merrill and Morgan Stanley, and that was only the latest substantial recruit to the firm from larger rivals.
In fact, some financial advisors who have switched their brokerage to Arkadios in recent years, such as Nina O’Neal, a partner and investment advisor at Raleigh, North Carolina-based registered investment advisory company AIM Advisors, specifically cite the advantage of more personalized service and access to senior management at midsize firms. In 2023, her advisory practice dropped Osaic just before it consolidated its eight brokerages into a single firm.
A founder who was once an advisor, a wider menu of alternative investment products and support for women’s advancement in the profession — plus the absence of private equity ownership — are driving the success of Arkadios, O’Neal said. In the past five years, the firm has moved up to its current spot at No. 22 in the overall IBD Elite rankings, from No. 40 in 2020.
“You’ve got a really sophisticated and entrepreneurial group of people,” O’Neal said. “I think that’s harder to find now in the independent broker-dealer space.”
On the other hand, the competition for top advisor talent and the accompanying growth generated by them is getting more intense. None of the 38 firms in the IBD Elite sustained lower business in 2024, and just five had a single-digit increase in revenue. The 10 firms below boosted their revenue at an average 30% clip.
Small and midsize firms seeking to compete at some level with giants like LPL, Osaic and Raymond James must “carve out some kind of a niche in the marketplace,” according to Brad Wales, the founder of consulting firm Transition to RIA. While noting that he supports advisors having more choices and isn’t cheering the demise of any smaller firms, he pointed out that the midsize companies can often boost their business at a higher rate than the big players because they start at a lower base in the prior year. A generic pitch like “‘we give great value and service to advisors,'” won’t cut it in the recruiting and retention fight, he said.
“If I’m one of these smaller ones, I think you have to try to position yourself to appeal to a certain type of financial advisor,” he said. “You’re not going to win that game against someone who has much bigger scale, and the costs continue to go up from a compliance standpoint and a staffing standpoint. … As it gets harder to compete, I think we’ll see more and more sell.”
Scroll down the slideshow for the ranking of the fastest growing independent brokerages in wealth management. Find last year’s ranking here. And see other features from this year’s edition of Financial Planning’s IBD Elite study:
Note: The companies below are ranked by the percentage increase in their annual revenue between 2024 and the prior year, as reported by the companies themselves. FP relies on each firm to state their annual metrics accurately.
