The great migration of wirehouse advisors and assets to independents is well underway. Cerulli Associates recently estimated that wirehouses will have a net loss of $188 billion in assets in 2009, with independent RIAs and independent b/ds each taking about $50 billion of that total and dually registered firms taking $63 billion. Already, Cerulli data shows advisor-managed assets at the wirehouses declined by a net $1.5 trillion in 2008?(including both market declines and advisor or client departures).

By year-end 2012, Cerulli expects wirehouse market share of AUM to fall to 41 percent, and independent market share (including RIAs, independent b/ds and dually registered firms) to rise to 39 percent. In 2008, the four big Wall Street wirehouse advisors managed $3.9 trillion, a 48 percent share of the market, down from $5.4 trillion, a 49 percent share, in 2007. Meanwhile, AUM for independents grew to $8.3 trillion in 2008, a 33 percent share of the market, from $11.2 trillion in 2007, or 32 percent.

Of course, Merrill Lynch has its own RIA support platform called Broadcort Advisor Services, in Jersey City. And while it was rumored to be on hold, some advisors recently told The Wall Street Journal that new wealth management CEO Sallie Krawcheck has revived the idea of keeping the RIA business growing. Other wirehouses could form their own RIA units as well, but, for now, most of them have their hands full digesting recent mergers and acquisitions, says Cerulli analyst Scott Smith.

In the meantime, the average size of RIA firms is up from one advisor to between two and four, according to Cerulli. That's in part because the number of advisors joining existing RIA firms is growing: At Schwab this number has tripled. As a result, Schwab has ramped up transitional services in its Advisors Turning Independent (ATI) program to keep the assets coming in.

While Schwab posted lousy Q3 results last week, net new assets flowing into the firm's Advisor Services business rose to $11.1 billion in the third quarter, with nearly 85 percent of those assets coming from new clients. According to Schwab data, 90 percent of advisors won new clients during the preceding six months, with 45 percent of new clients coming from wirehouse advisors.