Despite this year’s steady drumbeat of publicity about “breakaway brokers,” large wirehouse teams catering to wealthy clients are more likely to stay with mega-firms than go independent, according to a report released today by Boston-based research firm Cerulli Associates.

“The majority of wirehouse adviser movement is still between wirehouses,” the “State of the Wirehouses” report said.

Large adviser teams are the most tied into wirehouses’ comprehensive service model and have the most to gain from lucrative wirehouse recruiting packages, the report stated.

Although wirehouses will continue to lose assets and advisors to independent channels, they will nonetheless remain the industry’s strongest distribution channel, according to Cerulli.

“Wirehouses will increasingly become firms made up of fewer, but more productive advisors,” the report concluded.

“Wirehouses are still the 800-pound gorilla of the business,” said Scott Welch, senior managing director of Fortigent, a leading industry wealth management platform and research firm. “Even if there are a flood of advisers moving away, the independents are still at the margins, numbers-wise.”

Mr Welch said he also agreed with Cerulli’s conclusion that wirehouses will retain many successful brokers and boost productivity.

“All of the wirehouses are culling the bottom from their shops, and handsomely paying top performers to stick around,” he said. “And there’s no reason for most successful brokers to leave. It’s not necessarily their ambition to business owners. Somebody else takes care of the office, and they are well taken care. What’s not to like?”

Overall, according to the Cerulli report, wirehouses lost approximately 0.8 per cent market share in 2008, while independent RIAs gained 0.9 per cent market share.

Nonetheless, wirehouses, including Merrill Lynch, Morgan Stanley Smith Barney and UBS, remain the largest distribution channel, controlling near $4 trillion in assets at year-end 2008 and controlling nearly 50 per cent market share of adviser-managed assets.

Large teams control nearly 80 per cent of the assets at the wirehouses, according to the report, and typically focus on a wealthier clientele as part of the wirehouses push to target mass affluent investors with between $1 million and $5 million in net worth and between $500,000 and $2 million in investible assets.

But the wirehouses clearly have plenty of work ahead of them.

“Every wirehouse is experiencing some degree of turmoil either from a balance sheet affected by the financial crisis, merger and acquisition, or regulatory scrutiny,” the report noted.

“There are still some wealthy clients who have an aversion to wirehouses after all that has happened,” Mr Welch said. “They definitely have some repositioning to do.”