The migration from broker-dealer models to independent RIAs has been well-documented, but in a newer twist, many of those advisors are choosing to relinquish their FINRA license as part of the move.

At the core of this shift is the fact that the industry has made a decisive shift toward fee-based advice. Maintaining a brokerage license is no longer economically or operationally necessary. Many advisors now have 85% or more of client assets in advisory accounts, and that is even higher for many top teams who are large enough to open self-sustaining RIAs. Once a business reaches that threshold, the brokerage license serves little practical purpose. It becomes a legacy credential tied to a shrinking slice of revenue.

There are plenty of recent examples, including the $37-million move by UBS Private Wealth advisors Denis J. Cleary III and Gregory M. Devine, who left to start their own RIA. Both are solely investment advisor representatives.

Strategic Advantages

There is also a strategic element. Advisors moving to RIA models gain greater control over pricing, technology, and client experience. As the industry evolves toward comprehensive financial planning, the ability to operate without broker-dealer constraints is increasingly viewed as a competitive advantage rather than a tradeoff.

Products have evolved as well so fee-based versions are available for most every investment, including annuities and others more typically sold in commission accounts.

The Compliance Burden

Maintaining a brokerage license has become more of a headache than it is worth. It requires finding a cost-effective independent broker-dealer to park your license and then subjecting yourself to firm-level and FINRA-level supervision. Advisors who no longer rely on commission business are effectively paying for a parallel regulatory regime.

Advisors under that supervisory regime are not just contending with extra costs. It also constrains how advisors operate. Broker-dealer rules governing outside business activities, private investments, and marketing remain more restrictive and continue to create compliance risk. For many advisors, those rules are a source of friction and disciplinary exposure.

Why take that risk when your business model has evolved?

The RIA Advantage

The RIA structure, by contrast, simplifies the regulatory stack. Advisors can operate under a single regime, typically SEC or state oversight, while focusing on advisory services that scale with assets and planning relationships. Fee-based revenue, typically tied to assets under management, provides recurring, predictable income and aligns more directly with long-term client outcomes.

It's also arguably more transparent for the client. Advisors are positioning themselves as holistic planners who manage portfolios and craft financial plans as fiduciaries. It is confusing for investors if they are wearing two hats and pitching individual products or trading in a brokerage account that is not subject to the same standards.

In that context, dropping the FINRA license no longer seems as farfetched.