The Advisors Guide to Going Independent: Questions You Need Answers To (Part 1)

The Advisors Guide to Going Independent: Questions You Need Answers To (Part 1)

going independent questions

Published May 3, 2017

Choosing to go independent is a decision you shouldn’t take lightly. You may wonder what makes a good candidate for going independent. Is there some magic formula, skill set, or something else one should possess? The answer is no. Every one of the thousands of advisors who have gone independent has had his or her own unique epiphany or tipping point. They find great relief when they decide to pull the trigger and commit to a date, but they then have micro moments of doubt, fear, and insecurity, which is completely normal. Just like you, they fear they will lose clients and not be able to get back up and running. You should know that in all my years of helping advisors to transition, I have not yet witnessed personally a transition where this has been the case, especially where I’m involved!

It starts with information. You have to know what’s on the other side! Once you are comfortable that you have shed light on all the little dark corners, and you know what to expect, pulling the trigger becomes an invigorating and self-fulfilling process of enrichment . . . peppered with those micro moments of doubt! However, the psychology is strangely self-correcting. Whenever the confidence of advisors is shaken, they tend to go back to their gut, which always centers their soul and reconfirms their path.

Be careful you don’t just rely on information from the people who are trying to recruit you or sell you serivces. If they have a conflict of interest, they might paint a rosy picture that can give a false sense of confidence. Ask for references from different sources. You need to talk to advisors on the other side of the wall. They will objectively tell you the truth and, most importantly, the expectations they had going into this and the experience that actually prevailed.

How do you know if you’re ready to take the leap to independence?

Let’s talk about where you are versus where you want to be. Are you an advisor who has about a 40% payout, has some deferred comp, is pushed to cross-sell banking products, and has an office where the lights are turned on for you? Do you actually own your clients? The test for that is if you were to change firms, would your peers descend like vulures on your clients? Would your firm possibly challenge you legally? Are you vastly limited in your marketing efforts? Does compliance treat you like a child? If yes, you work in a wirehouse and all of this goes away when you go independent.

Going independent means you get to call the shots; you get to make your own decisions about everything from technology to the type of business model you envision. You have to decide if running a business is really what you want to do. If it is, then we have resources for you on how to evaluate the platforms available and choose the best one for you. There is no one best platform to use in the independent space. Most are very good, but many have niche competitive advantages that make them special. The trick is to have access to all of them, and you can only achieve that by working with a large RIA that has all the pipes built out.

The secret is all in the planning and preparation. When you execute the steps, success just follows. There is absolutely an entrpreneurial skill set required, but it’s not monumental. That is, we’re not building iPhones or pioneering the unknown; we’re managing a well-established, time-tested client service model. What has been taken for granted is the cost, time, and other resources required to manage compliance. Today’s entrepreneur outsources everything. Why build something from scratch that has already been built in a user friendly and less costly way? This is the core value proposition of our business model.

More questions? Email Charlie Latimer. We’d love to hear from you. Stay tuned for part two, where we dive into the issue of compliance and regulation, which causes the most hesitation for advisors who want to go independent.