Isn’t it time you started re-thinking your future as an Advisor- Portfolio Manager!

Over the last 10 years, several ‘independent dealers’ have been gobbled up by Banks, Insurance and Mutual Fund companies. Investors are left wondering what this really means for them and the advisors who represent them. Does market consolidation really serve the best interests of investors?

There’s only two reasons why small independent firms get acquired. 1) to create scale and increase profitability and 2) it allows the larger asset manufacturer proper, effective distribution of proprietary product through a large advisor channel. In short, 2 always leads to 1.

As a result of some traditional independent dealers having been acquired over the last 10 years, we are now seeing the biggest mass exodus of advisors – from Banks and asset manufacturers. But why?

Bank & Asset Manager acquisitions of independent brokerages simply entails the inevitable loss of both product agnosticism and advisor independence. After all, that IS the reason why Banks purchase independent dealers. To have greater market share of product distribution through advisors. It has nothing to do with advisor independence.

Where there is a bank or large asset manager, there is the push and pressure for advisors to promote and sell proprietary product. Banks & Fund Companies do not acquire Independent dealers so they can remain independent. It is simply not in the Acquirer’s business interests to do so.

In an age of increased regulatory scrutiny, proprietary conflicts of interests and disclosure rules, Investment Advisors are demanding independence with the ability to choose third party product. They are demanding a product agnostic platform. A non-product manufacturer. For many, this is the true essence of advisor independence.

Throughout the last 5 years of ongoing global volatility and market corrections: an ever – growing army of informed investors are looking at their advisors, the investment choices they make and the dealers they are moving to. They are under increased scrutiny. For every broker dealer that gets gobbled up, the client-investor is left asking, “What does this really mean. How does this all benefit me?”

In the US, advisors have already figured it out: an astounding 22,000 advisors left Banks & large Asset Management firms for independent dealer / managers last year alone. (Cerulli & Assoc) Canadian advisors are doing exactly the same now, moving to independent firms. The number of independent firms just keeps growing. It simply confirms the narrative.

The empirical evidence is overwhelming. The trending is crystal clear: Advisors are demanding professional independence because they recognize it promotes advisor integrity as a proper fiduciary to his/her client. It allows advisors to act in their best interests for choice and execution. The interests of both advisor – client are properly aligned!

Big Bank-Mega Asset Manager consolidation is the arch enemy of third party product choice, product agnosticism and free market competition. It simply doesn’t serve the interests of the advisor or his client.

Take a good look at yourself and the dealer you represent: Ask yourself why you became an Independent Advisor in the first place?

If you feel your dealer has lost its way and no longer represents your ideological interests (and those of your clients), feel free to contact me for a confidential discussion: mark@torenassociates.com

All inquiries are treated in strictest of confidence.