Consultancy on "new realities' driving advance of independents, discounters. Independent financial-planning, brokerage and investment-advisory channels and platforms that facilitate self-directed investors are gaining market share from big-name firms as a result of the financial crisis, says consulting and market-research provider Aite Group.

"Our market data suggests a significant shift toward both the independent advice model and use of self-directed brokerage platforms," says Douglas Dannemiller, a senior analyst with Aite, and co-author of a new report called New Realities in Wealth Management. "As a result, the independent broker-dealer and [RIA] segments have both gained market share at the expense of the dominant wirehouse firms."

Unprecedented flow

In addition to experiencing severe drops in asset values and fee revenue since the beginning of the crisis, wirehouses are being compelled to rethink their positioning to stay competitive, according to Aite. Recent consolidation -- think of Merrill Lynch, Wachovia Securities and Smith Barney -- only serves to complicate matters by forcing firms to tackle large-scale integration projects in the midst of a crisis as severe as anything since the 1930s.

Aite's research chief Alois Pirker says the U.S. wealth-management space "has seen an unprecedented flow of assets and advisors between firms and industry segments within the last 15 months."

Adds Pirker: "[Although] nearly all wealth-management firms have been confronted with sharp drops in client assets due to the market crash, those firms that have been able to attract new advisors have been able to replace a significant share of these assets."

Aite's New Realities in Wealth Management describes the impact of the crisis on Bank of America's Merrill unit, Schwab, Fidelity, LPL Financial and Wells Fargo, home to Wachovia Securities (now part of Wells Fargo Advisors) since late in 2008. -FWR

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