Answering the question, I tend to agree that breaking the staff was an act of symbolic significance. I believe, most of Saruman's power was lost with the destruction of his army. We know that in Tolkien's universe one spends his or her personal spiritual power on such things as casting spells, keeping supernatural control over someone else; it can be invested into an artefact as it was the case with The Ring. Sometimes power expenditure leads to devastation and one needs some time to "recharge", as Gandalf after his struggle against the Balrog at the Camber of Mazarbul. In some situations it could take ages, as for Sauron after he'd lost his Ring. If I can remember it right, Melkor's power was mostly exhausted when he lost his armies in the War of Wrath. I think similar thing happened to Saruman. His evil ways contributed to his weakening as an evil spirit is self-destructive and slowly looses the ability to regenerate. Thus Saruman hasn't lost his knowledge of magic but became incapable of using it.
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