How Independent Financial Advisors Are Quietly Outearning Their Wall Street Counterparts

America’s converted Victorian homes and strip-mall office parks—the kinds of locations that don’t appear on CNBC’s morning ticker—are experiencing something subtly amazing. Once written off as a small-time businessman with good intentions and Quicken, the independent financial advisor is now sitting on a sum of money that would make a Midtown managing director wince. Of course, not all of them. But enough that it’s becoming difficult to ignore the math.

The décor tells you something when you walk into one of these offices in, say, a leafy block of Naperville or a suburban Charlotte. Hardwood floors, a framed certificate next to a child’s crayon drawing, and a lone golden retriever dozing off next to the receptionist. It doesn’t appear to be wealthy. Part of the point is that. These advisors have been stealthily acquiring assets from the wirehouses for the past ten years, and the trend doesn’t appear to be abating. Industry consultants cited a Fidelity study that revealed team-based independent advisors make an average of roughly 32% more than their solo counterparts. Many of these teams are now earning salaries that are on par with or higher than what a senior vice president at a major bank receives following a harsh bonus cycle.

Although it took a while for the mechanics to come together, they are not mysterious. A lot of the heavy lifting was done by models. More than eight out of ten fee-based advisors now rely on model portfolios for at least a portion of their book, according to Broadridge, and assets following them reached a record $7.96 trillion by April, up from $6.44 trillion a year earlier. The one resource that independent advisors had been pleading for—time—was made available by that outsourcing. It’s time to make actual phone calls to clients, go to the funeral, and endure the awkward divorce discussion. It’s time to be human.

More than the spreadsheets, that might be the true story here. Despite its reputation, Wall Street has a cultural issue that no one is quite sure how to resolve. Advisors handcuffed to proprietary products, junior analysts working ninety-hour weeks, and the tedious ritual of receiving recommendations from someone in a different time zone. Although it’s not always glamorous, becoming independent is usually, well, your own. According to a recent Deloitte study conducted in collaboration with Wells Fargo Advisors Financial Network, 70% of independent advisors prioritize organic growth, and advisor productivity increases by 16% for companies that centralize portfolio management. Translation: advisors earn more money when they quit posing as hedge fund managers.

There are some things to be aware of. The fact that only 58% of independent practices have a written strategic plan is a statistic that should worry those who do not. In many stores, succession planning is a complete mess. Additionally, the wirehouses continue to have a strong brand, particularly among first-generation wealthy people who grew up witnessing their parents’ faith in the buildings’ names. It’s still unclear if the independents will be able to maintain this lead in a true bear market. The majority of their testing has taken place in pleasant weather.

As this develops, there’s a sense that the financial sector’s core values are changing in a way that the media hasn’t fully acknowledged. Without a doubt, Wall Street will continue to print money. However, twenty years ago, there was no such thing as an advisor earning $1.4 million annually from a converted bungalow off Route 9, three employees, and a functional coffee maker. It’s real now. Silently.