The on-going war between wirehouse brokerages and independents is a recurring theme for us. Reuters offers an interesting update on the war, noting data from Discovery that shows between November 2008 and last month, roughly 1,500 brokers fled the wirehouses brokerages--as big financial institutions are called--to work for independent firms (boutique firms news). That may seem like a small sum, and it is, but it does seem like the trend away from the big wirehouses may be gathering some steam.

The overall reputation of wirehouses--fairly or not--remains rather poor. Marketing challenges loom. The independents and all those discount brokerages, of course, love to stereotype the wirehouse guys. They are often depicted as a bunch of a commission-only account churners who play golf, eat fat-laden steak every day and sell products on which they get all sorts of undisclosed fees. But the brokers see the advisors as over-blowing the fee-based approach. (Just because an account is fee-based doesn't mean it's not a rip-off. In my time, I've seen some huge asset-based fees on accounts that trade little.)

The real issue for many wirehouse defectors may be the stifling bureaucracy. Reuters notes the case of one UBS (NYSE: UBS) broker who was asked for justification buying Berkshire Hathaway for a client. 

For more:
- here's the article

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