For many industry commentators, the only bright line that matters is between wirehouse and independent RIA. Recent recruiting moves prove that progress is more about evolution than revolution.
Raymond James has been busy prying advisors who together manage about $425 million in client assets out of the wirehouses.
These are not giant players in the industry, but they were comfortably generating about 1% a year in production from their existing accounts.
The noteworthy thing here is that when they jumped from UBS, Morgan Stanley, and Merrill Lynch, they jumped to the employee advisor channel at Raymond James, not the independent contractor side of the company.
And they did so not because they wanted to chart their own destiny but simply to be treated better and have more resources for their own clients.
The selling point here was that Raymond James & Associates prides itself on treating its employees as though they were the clients themselves -- a factor usually more associated with independent broker-dealers.
Certain firms evidently allow their advisors more dignity and independence than others, regardless of compensation model or channel or formal structure.
If every advisor in the business had access to the tools they needed to ensure optimum outcomes for their clients, would they use them? Probably not. There are a lot of crooked operators across the industry.
But maybe bad products would wither if nobody felt forced to sell them in order to keep their job. And maybe the fiduciary wars that are still simmering in Washington and in the industry would become irrelevant.
Sure, it's a utopian vision and I'm definitely not saying everything would be rosy if every advisor "woke up" and joined RJ&A tomorrow. It's a good firm but there are limits!
Still, incremental change works. If the "captive" firms become more like the independents and the independents get even better, the base for being able to compete at all rises.
Firms and advisors who don't want to meet that rising base standard are forced out of the industry. Clients forced to go elsewhere reap the rewards.
That's a goal I think everyone can work toward, if they want to do so.