Ask Brad: Will the Independent Broker-Dealer Model Survive?

This is the latest installment of a regular column to answer questions from advisors who are considering transitioning to an RIA model. To see Brad’s previous articles, click here. To submit your question, please email Brad here.

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I attended an industry gathering recently where each participant was asked to share observations for the future of the industry.

I was one of the last to share.

Having not been mentioned by anyone else, I proclaimed the pending demise of the independent broker-dealer (IBD) model.

Let me explain.

I predict either the IBD model will eventually cease to exist, or at a minimum, we will no longer refer to it as such.

I will explain my reasoning, but I am not predicting the demise of the W2 employee broker/dealer model (wirehouse, regional, etc.).

Those channels will continue to bleed headcount to independent offerings, but a subset of advisors will always be attracted to the employee model.