XYPN’s Michael Kitces and Alan Moore on the Independent Advisor Boom

If independent advisors don’t necessarily have bigger fish to fry, they may still be catching a lot more.

Focusing solely on high-net-worth clients and charging based on assets is one way to operate. The only problem is that most Americans aren’t millionaires. The pond is large, and many independent advisors are finding new areas to cast their lines. Between 2019 and 2025, XYPN firms saw client bases grow an average 25% per year, XYPN co-founders Michael Kitces and Alan Moore told Advisor Upside. By comparison, RIAs that custody with Charles Schwab reported only 6% CAGR over the same period.

Kitces and Moore attribute this boom to a planning-first philosophy where AUM and returns take a backseat, making financial advice more accessible. “If you’re trying to do financial planning on top of an asset minimum, you’re still ruling out 80% to 90% of the country,” Kitces said during the XYPN LIVE conference in Austin.

Go Your Own Way

Consolidation is often in the headlines, with bigger firms acquiring smaller ones. However, the exact opposite is actually happening at a much faster rate, Kitces said. Aggregators acquire roughly 150 to 200 firms annually, but in 2024, XYPN helped launch more than one new firm every business day. “Most [advisors] still prefer the autonomy of independence and don’t want to be employee No. 373 at a mega firm,” he said. “Aggregation is often just an exit strategy for mid-sized firms with founders who were not able to develop internal succession plans.”

• Roughly 27,000 advisors switch firms or go independent each year, according to McKinsey & Co.
• Cerulli projects independent RIA headcounts will experience 4% CAGR through 2028, reaching more than 56,000 advisors and outpacing all other channels.

Success as an independent advisor goes beyond the services you offer. Moore said some of the most effective advisors focus on very specific client sectors. For instance, Atlanta-based Pandowealth works exclusively with Chick-fil-A franchisees. “If you can get really defined and be willing to tell that Burger King franchise operator, ‘Not today,’ … we’re seeing them grow into incredibly successful firms,” he said.

Private vs Indie. Private equity’s growing role in wealth management is also fueling the independent boom. When PE firms buy RIAs, strict employee covenants can reshape advisor operations. Moore said advisors who reject PE ownership can either join another founder-led firm that may eventually sell to PE or start their own firm. “Private equity is not bad, they’re not evil, but it does have different time horizons, levels of diversification, and they own dozens, if not hundreds, of investments,” he said. “Those misalignments can make the culture of the firm really challenging.”