Trading Places

Inside views on the jobs market

Brokers set up shop on their own

October 3, 2008

fidelity.jpgNEW YORK (Reuters) – In a typical week, Scott Dell’Orfano, executive vice president of Fidelity’s Institutional Wealth Service, would meet with three or four teams of financial advisers coming into his Boston office.

But on a recent rainy Wednesday, he met with four groups before noon.

More brokers are considering moving from a big brokerage house to set up their own shop and aligning themselves with a custodial firm such as Fidelity, the big mutual fund firm.

While the adviser teams — numbering anywhere from three to a dozen — are just kicking the tires and considering whether to leave a big firm for greener pastures, the number of visits has intensified lately.

“We have been seeing a trend in top producers researching and setting up their own shop in what three years ago was a fairly unknown space — that being the RIA (Registered Independent Adviser) model,” Dell’Orfano said.

Fidelity said last week that 55 “breakaway brokers” — a term used to describe advisers or brokers leaving a large company to set up independent shops — selected the company as the custodian for their newly established independent firms during the first six months of 2008.

The newly independent firms brought more than $7 billion in assets through July 1, more than double the assets from new breakaway clients during all of 2007, according to Fidelity.

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