Most financial brokers and advisers find independence from big brokerage houses attractive, but the cost of regulatory compliance is keeping many of them from making the move, a new study by Fidelity Investments found.

Fifty-six percent of 1,046 investment professionals surveyed late last year said the independent model has become more attractive in today's economy, with nearly 70 percent expecting independence to offer greater earnings potential over the next 18 months.

The survey, released on Thursday, is Fidelity's fifth report since 2005 examining attitudes among brokers and advisers. Interest in independence was among the highest this year, Fidelity said.

The findings support the increasing popularity of brokers switching from large Wall Street firms, known as wirehouses, to independent broker dealers or registered investment advisers. Dissatisfaction with work at full-fledged brokerages and the desire for more money and independence are driving the trend.

The independence trend is firmly in place, said Sanjiv Mirchandani, president of Fidelity's National Financial unit, which has about $470 billion under custody.

It might accelerate going forward, he said. There's a secular trend from people going from wirehouses to independent broker dealers or registered investment advisers. The fly in the ointment in the independent model is that potentially they are concerned about what is on the horizon with regard to increased compliance.

Among the 18 percent who said the independent model was less attractive, the leading reason was the expected costs of complying with impending regulations.

The survey also found that brokers are getting older, with almost half over 50. While the average expected retirement age is 68, nearly one-third have not started to think about retirement and another 10 percent are not sure what to do about retirement planning.

Registered investment advisers, or RIAs, are independent fee-based businesses run by financial advisers while independent broker dealers provide a variety of services such as regulatory compliance. Hybrid models that allow brokers to earn money from fees and commissions are also becoming more popular.

In both cases, brokers keep most or all of the money they earn from clients and have more say over how to run their practices.

Fidelity has a stake in brokers becoming independent because its National Financial unit holds money on deposit from independent broker dealers and clears trades for them.

Fidelity also has an Institutional Wealth Services unit that caters to registered investment advisers and has about $500 billion under deposit, ranking it second to Charles Schwab Corp's Advisor Services business, which has $655 billion.

Career satisfaction rebounded to around 2007 levels, before the financial downturn, to 7.4 on a scale of 10. The index had sunk to 6.9 in 2008, the survey found.

Still, 17 percent reported switching firms in the last three years, with seven in 10 of those joining an existing firm. The top reason for changing was that brokers were not happy with changes in their existing firm's direction.

(Reporting by Philipp Gollner, editing by Bernard Orr)

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