Core Insights - The independent advisory firms are experiencing a second wave of breakaway advisors, indicating a shift in preference from traditional brokerage houses to independent Registered Investment Advisors (RIAs) [1][5][6] Growth Trends - Hybrid RIAs have seen an annualized asset growth rate of 12.2% over the past decade, outperforming independent RIAs at 10.8%, national and regional broker-dealers at 8.9%, and wirehouses at 6.4% [2] - Wirehouses manage approximately $12 trillion in assets, while independent RIAs control nearly $6 trillion, followed by national and regional broker-dealers at $5.7 trillion and hybrid independent advisors at $4 trillion [3] Industry Dynamics - Mergers and acquisitions, often supported by private equity, have led to the emergence of various categories of RIAs, including aggregators and mega RIAs, which aim to compete with major Wall Street firms [4] - The trend of financial advisors migrating from traditional brokerage to independent financial planning is driving innovation within the industry, although it is also causing growing pains for the independent channel [5] Advisor Preferences - A significant number of advisors are expressing a preference for the hybrid RIA channel, with a 9.1% year-over-year increase noted in a recent survey [2] - The initial wave of advisors who left wirehouses for independence are now experiencing a second breakaway, as many find that larger RIAs are becoming rigid and bureaucratic [6][8] Challenges and Opportunities - The growth of mega RIAs is creating a more cookie-cutter experience for advisors, which can limit their autonomy and flexibility [9] - Smaller, purpose-built RIAs are emerging to fill gaps in the market by fostering a community that supports growth while maintaining a small-firm feel [11]