Zero Commissions a 'Huge Deal' for Advisors, BDs: Henschen

"There are some other ones, too," the recruiter said, "which are [generally] small and midsize, as well as a few larger ones. Most BDs are not dual-clearing friendly," Henschen said.  

The longtime industry watcher says that while it remains to be seen if clearing firms "hold their ground or drop their ticket charges," he expects some advisors to move with their feet in reaction to zero commissions: "This will certainly be a driver for advisors changing broker-dealers to gravitate to broker-dealers that are dual-clearing friendly."

Fee-Only Trend

The zero commissions "will also fuel advisors to give up their licenses and go fee only," according to Henschen.

"With the CFP Board focusing more on pricing going forward — as well as CFPs being required to apply a fiduciary standard on investment advice as of Oct. 1 (being enforced as of June 30, 2020) — costs like ticket charges, administration fees, markups and platform fees will become increasingly important to weigh out," he explained. 

Henschen also says the latest news should prompt more wirehouse reps to break away: "For wirehouse advisors that tend to be more active traders and use all-inclusive accounts, the new zero ticket will be a major encouragement to go fee only or join an independent broker-dealer that has dual clearing in place."

As for broker-dealers, those with higher costs in these areas "will need to offer value-added services to justify the additional costs," the recruiter says.

Zero commissions should be a "major driver [of change] for those advisors who want to net more and lower client costs," he added. "This [industry development] is going to cause a lot of ripple effects."