2022 was not the best year for the retail broker-dealer industry, but it could have been much worse. Across the retail brokerage industry, broker-dealers weathered the broad stock market's struggles of the past 12 months far better than they have in past market swings, according to InvestmentNews data.
As measured by projected average annual revenue per financial advisor, broker-dealers managed to stand against the weight of declining markets. Much of the broad retail wealth management industry's insulation came from the industry's long-term switch to fee-based business and rising interest rates. This helped firms' profit margins because broker-dealers make money on clients' cash holdings.
According to InvestmentNews data, retail broker-dealers successfully made strides on a variety of fronts in 2022, despite the slowdown in recruitment. Additionally, independent broker-dealers (IBDs) begin to compete with aggregators of registered investment advisors (RIAs), with several IBDs making investments in large branch offices of advisors already registered with the firm.
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