The U.S. wealth management industry hit $58 trillion in client assets in 2024—an 18% increase from the prior year. Beneath this growth lies a fundamental reordering of competitive advantage. Brand prestige and distribution scale, the twin pillars of wirehouse dominance for decades, no longer determine the winner. Technology platforms that enable advisor productivity and deliver superior client experiences are the real drivers of market dominance.
As documented in our recent flagship report, New Realities in Wealth Management, this isn’t a temporary disruption. It represents a permanent shift in what clients and advisors value—and it’s reshaping the industry’s power structure.
The Old Logic vs. The New Logic
Wealth management historically rewarded firms with recognizable brand names, massive advisor networks, and proprietary products. Clients selected firms based on institutional reputation. Advisors joined for the prestige of the platform and access to affluent client bases. Scale created insuperable competitive advantages.
That logic has been inverted. Today’s competitive advantages come from:
- Platform sophistication: Clients evaluate firms on digital capabilities, not letterhead or brand heritage.
- Advisor enablement: Top producers prioritize operational autonomy and technology tools over institutional affiliation
- Technology velocity: The ability to rapidly deploy new capabilities matters more than balance sheet size
Investors are voting with their feet. The data shows platform-driven models capturing market share while brand-dependent models let it slip away.
Online Brokerages: Platform as Product
Online and discount brokers now control $14.9 trillion in assets (26% market share), up from 19% in 2017. The segment’s 17% annual growth since 2017 far outpaces that of wirehouse and other channels. Datos Insights projects online and discount brokerage will lead the industry with 32% market share by 2035.
Robinhood’s assets surged 87% to $193 billion in 2024. Interactive Brokers grew 33% to $568 billion. These firms built their competitive position entirely on platform capabilities—fractional shares, instant execution, crypto access, sophisticated analytics, and intuitive mobile interfaces. They have minimal brand equity in the traditional sense; their “brand” is their platform experience.
This reflects a fundamental shift in how clients conceptualize value, particularly younger investors. They view investment management from a technology and not a relationship lens. The advisory relationship, when they want it at all, comes after platform experience, not before. Online brokerages moved upmarket by adding research, education, and advisory services while wirehouses struggled to move down-market digitally—a telling asymmetry about which model adapts faster.
Wirehouses: When Brand Can’t Compensate for Platform Deficits
Traditional wirehouses lost seven percentage points of market share since 2017, falling from 29% to 22% despite heavy technology investment. Projections of 16% market share by 2035 signal the reversal of their historical dominance.
The wirehouse dilemma illustrates platform versus brand starkly. Morgan Stanley, Merrill Lynch, UBS, and Wells Fargo possess unmatched brand recognition. They’ve spent billions on technology—Morgan Stanley’s AI tools (Debrief and AskResearch) synthesize meeting insights and market research in real time. Edward Jones deployed Salesforce across all 16,000 branches in a multi-year, nine-figure commitment.
Yet these firms continue losing share. Why? Because their technology investments must overcome structural platform disadvantages that brand equity cannot offset.
Wirehouses face an impossible optimization problem: they need scale economics that require high advisor productivity, but their employed model creates compensation rigidity. Morgan Stanley raised production thresholds by ~10% and eliminated payouts for households under $300,000. Merrill Lynch cut payouts to just 20% for accounts between $250,000 and $500,000. UBS took the opposite approach after watching $2.6 billion and $1.8 billion teams decamp to LPL Financial and Rockefeller—increasing payouts across revenue tiers and introducing 60% payouts for advisors generating over $20 million annually.
Despite trying opposite strategies, all continued losing market share. The problem isn’t execution; it’s that wirehouses require advisors to generate returns on expensive real estate, compliance infrastructure, and corporate overhead. Independent platforms externalize these costs, giving advisors both higher compensation and superior technology access. No amount of brand prestige solves this structural disadvantage.
The technology gap creates asymmetric risks. Independent advisors now access institutional-grade portfolio management, CRM, and financial planning software through vendors like Orion, Black Diamond, and Envestnet. Aging wirehouse systems often lag behind these third-party platforms, making independence not just economically attractive but technologically superior. Brand becomes a liability if it’s associated with subpar tools.
Independence: Advisors Choosing Platform Flexibility Over Brand Affiliation
Independent RIAs completed a record 272 M&A transactions in 2024, with private equity backing 78% of them. The number of SEC-registered RIAs hit 15,396, with new firms forming faster than the industry can consolidate them.
This exodus reflects advisor recognition that platform capabilities matter more than brand association. Self-clearing retail brokerages captured much of this migration. RBC Wealth Management grew 23%, recruiting multiple billion-dollar teams and absorbing displaced First Republic talent. Its entrepreneurial model offers what brand-dependent wirehouses cannot: institutional platform capabilities without institutional constraints.
Advisors leaving Morgan Stanley or Merrill Lynch aren’t abandoning brand equity lightly. They’re making calculated assessments that independent platforms now provide superior technology, better economics, and greater operational control. The brand premium has evaporated.
This migration creates a compounding problem for wirehouses. As top producers leave, the remaining advisor base skews toward lower production, worsening unit economics and forcing further productivity demands—triggering another wave of departures. Brand loyalty once prevented this spiral. Platform superiority now accelerates it.
Why Platform Wins: The Enabling Infrastructure Advantage
Platform-based models win because they treat advisors as customers to enable rather than employees to control. This produces three compounding advantages:
1. Technology velocity: Independent platforms can integrate best-of-breed technology faster than wirehouses can build or acquire it. While wirehouses navigate bureaucracy and legacy system constraints, platform providers like LPL or RBC can rapidly deploy new vendor integrations. Speed of innovation becomes a sustainable advantage.
2. Operational flexibility: Platform models let advisors customize their tech stack, service model, and client experience. Wirehouses mandate standardization for compliance and cross-selling purposes, which constrains differentiation. In a market where advisors increasingly specialize—whether in crypto, alternative investments, or concentrated stock planning—flexibility beats standardization.
3. Economic alignment: Platform providers succeed when advisors succeed; their business model aligns with advisor growth. Wirehouses must balance advisor compensation against institutional profitability, product distribution goals, and investment banking relationships. This misalignment becomes visible to advisors, particularly top producers who subsidize lower-productivity colleagues.
Morgan Stanley’s AI tools and Edward Jones’ Salesforce deployment represent meaningful investments, but they’re defensive moves that reflect a structural disadvantage. These firms must continuously pour capital into technology to maintain parity with what independent advisors access through third-party vendors. Platform providers aggregate advisor demand to negotiate better vendor terms and faster feature development—an advantage that compounds over time.
The Competitive Logic Going Forward
The old competitive advantages—brand reputation, advisor headcount, proprietary products, distribution scale—have become neutral or even negative factors. Large advisor networks create higher fixed costs. Proprietary products limit advisors’ ability to deliver customized solutions. Brand heritage means nothing to clients evaluating firms on mobile app ratings and digital account opening speed.
The new competitive advantages are:
- Technology infrastructure that enables rather than constrains: Winning platforms provide enterprise-grade capabilities while preserving advisor autonomy. They invest in integration layers, not walled gardens.
- Advisor economics that align with productivity: Compensation models that reward growth without penalizing specialization or entrepreneurship attract and retain top talent.
- Speed of capability deployment: The ability to rapidly integrate new vendors, launch new services, or adapt to regulatory changes matters more than the size of the existing platform.
- Client experience that assumes digital-first: Platforms built for mobile, self-service, and instant access win younger clients. Retrofitting digital onto analog infrastructure produces inferior experiences that clients immediately recognize.
Who Wins, Who Loses
Mid-tier regional brokerages face existential threats—they lack wirehouse scale for technology arms races but carry the same structural disadvantages. Expect continued consolidation or conversion to platform models.
Traditional wirehouses must answer whether their integrated model—combining custody, clearing, advisory, and investment banking—can survive in a world where integration creates bureaucracy that slows platform evolution. Their brand equity buys time but not immunity.
The winners are platforms that enable rather than employ. Self-clearing brokerages like RBC and LPL provide institutional infrastructure without institutional constraints. Technology vendors supplying enterprise-grade capabilities to independents will capture growing wallet share. Online brokerages that successfully layer advisory services onto digital-first platforms will gain share from both ends of the market.
Platform as Permanent Advantage
Brand equity was defensible because it took decades to build and was difficult to replicate. Platform capabilities are defensible for the opposite reason—they require continuous investment and constant evolution. Falling behind by one technology generation makes catching up nearly impossible, as wirehouses are discovering.
The wealth management industry has entered an era where competitive advantage comes from enabling others rather than controlling them, from technology velocity rather than asset scale, and from platform sophistication rather than brand heritage. Firms still optimizing for the old logic won’t suddenly become irrelevant. They’ll simply become less relevant each quarter, as market share and talent gradually migrate to platforms built for the new competitive reality.
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