In today’s financial landscape, the notion of independence has taken center stage for financial advisors. Top firms are imposing stringent compliance measures, facing financial penalties for misconduct, and subjecting advisors to invasive surveillance. As a result, many advisors feel trapped and long for personal freedom.
Compensation structures are also becoming uncertain, leaving advisors unsure about their future earnings and prospects. The constant changes and lack of stability create an environment of unpredictability.
For those who seek an escape from the shackles of corporate oversight and aspire to chart their own course, the concept of independence becomes alluring. But venturing into independence comes with its own set of challenges and trade-offs.
Here’s a concise guide to redefine independence for financial advisors:nce
Choose Your Support: When transitioning to independence, assess the level of support you desire. Some platforms offer significant assistance while still allowing you to own your business. On the other hand, establishing your RIA enables you to outsource tasks you’d rather not handle. Weigh the tasks you enjoy and those you’d prefer to delegate.
Embrace Entrepreneurship: Owning and operating your RIA demands an entrepreneurial mindset. Are you ready for the learning curve and the challenges of managing your business and technology? Take an honest self-assessment to determine if you possess the qualities required for success, one such assessment is available at 16Personalities. Be honest with yourself and play to your strengths.
A Spectrum of Independence: Independence comes in various forms, from full control of your RIA to intermediary firms with similarities to big wirehouses. Choose the level of freedom that aligns with your aspirations.
How Much Surveillance? Big wirehouses are increasing surveillance of employees, the most draconian we’ve heard of to date is at JPMorgan Chase. Are you good with turning over your personal phone, having your biometrics monitored, and everything in the background of your Zoom meetings? If not, moving to as much independence as possible returns your privacy and rights to you.
Indie Profits: Going independent will allow you to take a larger revenue share home. Tired of the larger percentages and lack of book ownership at a big wirehouse? An indie RIA lets you keep more. Make sure to review all contracts for any leave behind clauses for clients and assets.
Think Long-Term: Although tempting recruiting deals may offer short-term gains, consider the long-term benefits of independence. Higher ongoing payouts, potential capital gains, and freedom from corporate restrictions are among the advantages.
A Personal Decision: Independence is not a one-size-fits-all concept. Each advisor’s definition of freedom varies, and there are numerous solutions to accommodate diverse interests.
As consultants for elite financial advisors at The Gershman Group, we have worked with advisors across the spectrum. Assessing an advisor’s personality and matching it to the best-fit options is akin to a personality test. Some individuals possess an innate entrepreneurial drive and are only satisfied when owning their own RIA, while others require the structure and support offered by big firms, preferring to delegate certain responsibilities. Most advisors fall somewhere in between, and fortunately, there are numerous suitable solutions available to accommodate their diverse interests.
Remember, true independence requires careful evaluation of your options, strengths, and preferences. Embrace the journey, weigh the pros and cons, and choose the path that aligns with your vision of financial advisor independence. We’re here to guide you every step of the way. Embrace your power and redefine independence!