Amid the upheaval, big producers at investment houses are being urged by customers to irritate to independent firms

By Ben Levisohn

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It was almost of a piece the end of a marriage for broker Lori Van Dusen. After 22 years at Citigroup (C) managing client money, she decided it was time to leave.

From her Rochester (N.Y.) office, Van Dusen manages money for high-net-worth families and institutions, with her average client bill worth around $40 million. Brokers like Van Dusen switch firms total the time. But her reasons for leaving are certainly not typical of many brokers. Van Dusen already had a degree of autonomy that’s rare in the brokerage industry. However, the approval process in the place of a new investing. was long-winded and arduous and Van Dusen believed it was in the most wise interest of her clients to remark a firm than catered to the needs of high-net-worth investors.

So after a year and a half of looking at options with her partner, George Dunn, she beyond a doubt to join Convergent Wealth Advisors. Together, the team brought around $7 billion in retainer effects, else than doubling Convergent’s bulk. &qout;We had a profession inside a business," Van Dusen says. "But we desire a sophisticated dependant base and we needed an infrastructure designed for our clients."

In the industry, Van Dusen is known like a breakaway broker. For many years after this, many brokers have left their wirehouse homes to become independent. Amid the current confusion onward Wall Street, that outflow has increased from a resolute run to a rush. It’s difficult to quantify exact numbers—no one can express exactly how many brokers have left in the past year. But assets transferred from these brokers to independent brokerages like Charles Schwab (SCHW), Fidelity Investments, and TD Ameritrade (AMTD) have increased tremendously.

In the highest half of 2008, Fidelity gained 55 breakaway brokers and $7 billion in assets. Schwab Institutional, a alienation of Charles Schwab, added $9.4 billion in net new property from newly independent advisers during the first half of 2008, up 300% from the same period last year and outpacing 2007’s total $9.2 billion. "If you look at the 5,000 advisors associated with Schwab, that little ragtag body of troops has outgained the entire Wall Street combined in the last decade," says Timothy Welsh, president of Nexus Strategy, a dense that assists brokers in going independent.

Wall Street should be worried. The departing advisers are not the B-team. Rather, many are preference Van Dusen and have been at their firms for years. They’re older—60% liberty during their 40s and 50s, according to information from Discovery Database, which tracks adviser movement. They’re also established—83% of brokers considering leaving have assets of $10 million or more when exposed to management and 33% have more than $100 million, according to a survey by the Aite Group, a Boston-based consulting firm. "The advisers who are leaving are the ones that the firms would like to retain," says Aite Group analyst Alois Pirker.

Why the exodus? For individual, there are fewer reasons to stay. Firms similar Schwab and Fidelity now specialize in setting up an adviser’sitting infrastructure, everything from clearing trades to monetary software, which helps make for a seamless change. Furthermore, with the stock prices of Wall Street firms decimated, the value of the shares that provided additional compensation and gave advisers a stake in the company’session future have plummeted. The once "golden handcuffs" are now aluminum foil.