Industry analysts at Cerulli say the four wirehouse firms lost 12% of their assets under management between 2007 and 2010 and are still fading from their once-dominant role in the markets.
They expect the declines to continue over the next few years while the rest of the industry keeps expanding.
By 2013, Cerulli says the share of overall AUM held by Wells Fargo, UBS, Morgan Stanley and BofA Merrill Lynch will drop to 35% from 43% back in 2010.
Cerulli director Bing Waldert says "the years since 2007 represent a worst-case scenario for the wirehouses, as these firms were punished by the bear market and their perceived role in the financial crisis."
Naturally, that's a reason for smaller firms -- everyone else out there -- to rejoice.
But it's still a massive share of American wealth split among just four firms. That reflects both how profoundly fragmented the other 57% of the market is, as well as how much opportunity there is for strong advisory businesses to absorb weaker competitors.
On average, each wirehouse has about $1.2 trillion in its client accounts. Cerulli estimates $6.4 trillion for the rest of the industry to fight over.
With that kind of scale on their side, Waldert suspects they're not really interested in gaining or even keeping market share. They're looking to concentrate on their most successful advisors and let the rest go.
Waldert has some "cautionary warnings" there about retention, recruiting, and breakaway brokers.
"First, it must be understood where these advisors will come from if these firms are not successfully hiring new advisors into the industry," he says.
"Second, given the number of flexible options for an advisor, any cost-cutting in the name of profits that affects these advisors businesses would cause them to leave."
That's the breakaway manifesto in a nutshell.