As a channel of wealth management that generates more business than some countries, the firms of Financial Planning’s IBD Elite are constantly evolving to meet client and advisor demands.
The four charts below reveal the sheer size of the channel, its shifts to registered investment advisory business and fee revenue, and the dominance of the No. 1 firm, LPL Financial. But for all of their scale, independent wealth management firms must still recruit and retain advisors who could otherwise elect to stay with wirehouses or launch or join an RIA.
And for advisors who decide to depart for greener pastures, doing so successfully depends on “a conversation around control, ownership and risk tolerance,” according to Steve Voss, a former vice president of business consulting at Raymond James who recently launched CPX Partners, a consulting firm for advisors planning transitions. Leaving wirehouses or other employee-channel firms means giving up services such as payroll, technology, real estate, health insurance and retirement plans. And going independent entails decisions on any number of questions underlying an advisory practice, from brokerage or RIA affiliation to compliance and custodians.
“If you want to take on more risk, and you’re comfortable with it and you have a high tolerance for it, I think you’re going to see those advisors shift faster into the independent broker-dealer or, perhaps, the RIA world,” Voss said. “There is a fit for everyone. It depends on what stage of life they’re in and where they’re at in their career and what’s most important.”
In that environment, recruiting and acquisitions have acted as a magnet to LPL, which works with advisors in as many different ways as possible and has grown its headcount to nearly 30,000 advisors — a level once thought impossible. But firms that fixate on trying to catch up may be doing themselves a disservice in their roles as an alternative to LPL on the recruiting trail.
“It would be dangerous for firms to look at it like a race,” Voss said. “How do you maintain that level of service as you continue to grow, and how do you maintain that culture and the why? If it’s a race, then people start to lose focus on those things.”
Scroll down the page for a glimpse into 18 years of data from Financial Planning’s IBD Elite on the key trends shaping independent wealth management firms. And see other features from this year’s edition of the IBD Elite study:
Business through the roof
The channel’s combined annual revenue surged by 15% to $50.03 billion in 2024 — the largest percentage increase since business jumped by 24% in 2021 following a brief dropoff during the pandemic and hikes of 20% in 2019 and 2010.
The long-term shift to advisory business
Between 2007 and 2024, revenue from advisory fees soared 709% as the main driver of the channel’s total top line, which rose by 278%. On the other hand, commissions have climbed just 48% over the past 18 years, having begun that period as the primary source of the channel’s revenue.
Shifting business models among the giants
The changes to the makeup of the revenue collected by the 10 largest firms in the IBD Elite each year displays how they were behind the channel as a whole in their transition to an advisory-focused business. After advisory fees fell below 50% of the median top 10 firm’s revenue in 2019, both it and the average climbed above half the following year. In contrast, advisory fees had overtaken commissions across the channel in 2017.
Heavy is the crown
LPL remains the dominant No. 1 of the channel, full stop. The firm’s many rivals among independent brokerages and RIAs will always recruit teams out of firms that LPL has acquired or among its record existing ranks of more than 29,000 advisors. But, last year, the revenue generated by the perennial No. 1 of the IBD Elite outpaced that of its nearest competitor, Ameriprise, by more than $5 billion.
