Eleven breakaways, 979 moves: custody is now the contract

Eleven breakaways against 979 advisor moves: the breakaway—advisor leaves, hangs a shingle, builds a book—is now a rounding error inside a market that has shifted up the stack to custody networks and whole enterprises. The same period produced 112 team liftouts, a ten-to-one gap that reframes the talent market as a bulk transfer to new parents. &Partners added an $838 million team from Wells Fargo, its 123rd practice, and a team that size is a business in its own right.

The month produced three very different answers to how to buy scale. LPL Financial's $31 billion Mariner network purchase is a wholesale grab of an entire custody relationship book, while UBS paid $2.9 million per advisor in a $1.4 billion deal for the Bernstein team—enterprise prices for enterprise talent. Cetera's $2.1 billion Sierra Ridge OSJ, from LPL, adds a 40-advisor recruiting pipeline, a third path that keeps producing advisors after the close. One approach buys the customer list, another buys the people and the brand attached to them, and the third buys a structure with advisors already installed and a pipeline to keep them coming.

LPL is paying for relationships already in place; UBS for a single branded team at a price per advisor that works only if those advisors produce from day one; and Cetera for a structure with advisors attached and a pipeline to keep them coming. All three are aggregation moves; none of them produces a new independent RIA.

UBS logged 167 events over the same 30 days, Merit Financial Advisors 119, and LPL Financial 42, against 979 advisor moves and a ledger in which 667 deals were announced and 247 closed. The merger pipeline is running hotter than the startup pipeline, and the firms generating the most noise are buyers and platforms, not founders.

The unit of competition has changed. When 11 breakaways stand against 979 moves, the custody contract is the product and the advisor is the line item that comes with it; at that price, UBS is buying the contract. The milestone to watch is who signs the next custody contract.