Why do advisors go independent

Thinking about going independent? Brush up on the basics of telling your breakaway brand story. Millennial women are approaching their peak earning years. Is your firm ready to serve them? Here are the major pros of ownership control versus the cons of giving up wirehouse benefits. The Right Choice? Recent Articles by Author. Thinking About Going Independent? These are only a few of the questions you must address.

Your answers will depend heavily on two factors. First, what is your projected income? Second, do you have an adequate cash reserve to establish your business up front? Your cost-benefit analysis will shed much light on these decisions. Office space. There are several options.

You could purchase a business duplex and rent out the other half. Perhaps you know a CPA or other professional who will sublet office space to you. If you create a partnership, formal or informal, you would share expenses.

This is an area of great importance. There are certain staples you will need. Many of these second-tier tools are becoming commonplace today. Contact management system. I paid for the software once plus any upgrades and thus avoid a recurring expense. In addition, I tried Redtail and salesforce. If you plan to be a solo practitioner with an assistant, ACT!

If you plan to grow and add multiple employees, budget permitting, salesforce. Investment research tools. Will you outsource your asset management or keep it in house? Note : In the original article, we wrote that Principia has been discontinued for new users, but a Morningstar spokesperson said that in addition to continuing to provide Principia support for existing users, it will also make Principia available to new Advisor Workstation subscribers as well.

If you want something more robust, Office incorporates additional features such as performance reporting, limited financial planning, etc. Based on my need for research, I chose Advisor Workstation. I also use QuoteStream by QuoteMedia, which is a quality charting and research tool.

Financial planning tools. CB provides Monte Carlo simulation, decision tree analysis, optimization, time series forecasting and a host of additional statistical tools. Having recently compared this to a couple of other applications, I decided not to make a change. Employer benefits. You should compare your current benefits and estimate the cost you will bear as an independent.

Benefits such as a company retirement plan, health insurance, deferred compensation, stock options, restricted stock and other monetary rewards have value. When creating your cost-benefit analysis, be sure to obtain a health insurance quote as you will bear the entire premium, which may be substantially more than you are currently paying. The two components of this are income and expenses. In reality, you are preparing a budget, the results of which will guide many of your decisions.

Here are some steps to consider when projecting your income. Some steps may not apply depending on your choice of broker or RIA. Project revenue from additional services you plan to provide e. Not surprisingly, most of the advisors in the survey had started out at a full-service bank or brokerage firm or were employed at national or regional broker-dealer before transitioning to the independent model.

And while this career path is still very common among new advisors just coming into the wealth management industry, Schwab Advisor Services and Dynasty Financial Partners see an alternative for young advisors.

Shirl Penney, Dynasty's President and CEO, describes going independent as akin to learning a foreign language, and points out that advisors increasingly want to be independent, but not alone. Going independent has its pros and its cons. It will be up to the growing RIA-support services in the industry to show new wealth managers that they can find independent success within a supportive community of fellow entrepreneurs.

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We and our partners process data to: Actively scan device characteristics for identification. I Accept Show Purposes. Your Money. The pandemic has increased some introspection among advisors on where they are with their businesses and their desire to have greater control over the client experience.

The COVID crisis is inspiring more financial advisors to consider going it alone, empowered by new wealth management technologies and a desire to run their own shops.

The interest comes as advisors discover that managing client relationships from home works well and are questioning their current ties to traditional firms. As a result, wealth management technology firms are reporting a surge in inbound calls in recent weeks from prospective clients looking for information on how they can support independent advisors.

New wealth management technology is also empowering advisors to pursue independence — particularly turnkey asset management programs TAMP , independent technology platforms that allow advisors to outsource activities such as account setup and documentation as well as discretionary portfolio management. The platforms provide advisors with the technology and tools to become an independent investment counsellor portfolio manager ICPM. Canada has been slowly building a TAMP ecosystem, but the pace is expected to increase following the pandemic.