Regional broker-dealers aren’t wirehouses, but they are still brokerage firms employing advisors who often practice in group offices. Thus, regional firm reps occupy a middle ground between wirehouses and independent financial advisor. As researcher Cerulli Associates put it recently, “Regional B/Ds can be considered to be the first step in a continuum of independence. Although regional B/D advisors are not, by definition, independent, they operate with more autonomy than their wirehouse brethren.”

At one point, that middle-of-the-road niche nearly spelled the end for the smaller firms. They were outmatched by larger wirehouses like UBS and Legg Mason who were buying them out and snatching up advisors at an alarming rate as the number of reps at regional broker-dealers plummeted from 36,691 in 2004 to 33,029 in 2007.

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