The big firms are known as the bastions of the employee advisor model. But industry consulting firm Tiburon thinks they might loosen their resistance to independent contractors as they lose market share.
The argument here is a little mysterious. Tiburon says that the wirehouses are getting nervous enough about their dwindling market share that they'll end up letting top reps "break away" without ever leaving the firm.
But so far, Morgan Stanley and Merrill Lynch seem more eager to dump less-profitable accounts and reps. They're willing to shrink their share in order to achieve their other objectives, which largely amount to squeezing more profits out of their advisors.
Independent advisors tend to have bigger AUM numbers but represent a lot less profit per dollar to the brokerage firm.
It's more likely that, as a recruiter tells AdvisorOne, the wirehouses will simply keep offering incentives to top producers to get them to stay -- at least in the short term.
Down the road, if the wirehouses find that they've lost too much share, they might contemplate changing their compensation model. But that seems like a long way from here, given the fat that each of the big four firms still runs about 10% of all investor AUM in the country.