Financial advisors have never had a greater wealth of opportunities when it comes to pursuing an independent career path. From the wider availability of technological platforms that allow even the smallest independent brokerage to compete with the largest wirehouse, to cultural shifts that have allowed advisors to expand their client base, to supported independence models that allow every advisor to customize a practice to fit their strengths, independence is achievable for every advisor.
However, as with any new business venture, there are a few lessons that can only be learned through experience. Check out the top five lessons independent financial advisors wish they’d learned before pursuing independence.
Prepare Before You Make The Leap
The wirehouse has its limitations, particularly for experienced, entrepreneurial advisors, but it has its advantages as well. For many advisors, the structured environment provided by a wirehouse can mean that advisors aren’t prepared for the complexities of an independent practice. Some advisors, faced with complicated practice obligations, tend to focus on the day-to-day of practice without focusing on acquiring the professional designations and compliance, technology, communications, and marketing skills that can ensure a successful transition to independent practice.
Advisors should also have their own financial house in order, and understand that a move may mean a change in compensation structure and even a period of time without income.
Being prepared for these transitional challenges can ensure that a transition proceeds smoothly and ensure that advisors make the most of the unique opportunities presented during a move.
Don’t Try To Do It All Yourself
Even the most entrepreneurial-minded advisor simply doesn’t have the time, or the expertise, to handle every aspect of starting a new business. From finding office space, to choosing the right software products, to ensuring that compliance obligations are met, to making sure the bills are paid on time, managing a new business can take a great deal of time and energy. For advisors who are in the midst of shepherding client relationships through the transition process, standing up a startup business can be a distraction and a recipe for burnout.
Just as a financial advisor’s clients rely on an advisor’s expertise and experience, advisors pursuing independence should seek out experts with the experience, focus, and, most importantly, the time to ensure that a new RIA, broker-dealer, or hybrid firm is as successful as it can be. Advisors should seek out strategic partnerships, ranging from employee models with regional firms to supported independence platforms, to ensure that independence doesn’t mean going it alone. Finding the right partners is critical. At Terrana Group, we have over three decades of experience ensuring that advisors seeking independence have the right connections to create successful new businesses.
Remember You’re In The People Business, Not The Money Business
An advisor’s role is to help clients create and grow wealth. This philosophy works in a different priority order than a wirehouse employee, where name recognition, research, analysis, and strategic planning is the recipe for success. While, as an independent advisor, it’s critical to remember that the most important asset any firm can have is its relationships. Creating, nurturing, maintaining, and growing client relationships is as fundamental to a new advisory practice as the firm name, or any analytical tool, or investment strategy which may help carry the relationship.
It can be easy for newly independent advisors to get caught up in the day-to-day of building networks, finding new clients, and trying to stay on the cutting edge of technology tools. But advisors should always remember that existing client relationships are the most important part of a successful practice. Communicating effectively and frequently with clients can ensure that clients see their advisor as a trusted confidant, and can help advisors understand a client’s goals, approaches, and values — all critical aspects of a successful advisory relationship.
Build A Network Of Mentors
For newly independent advisors, the biggest pitfalls are the “unknown unknowns” — the challenges that aren’t immediately obvious but that can sink a new practice. Building a network of trusted advisors and mentors can make sure a newly independent advisor stays one step ahead of potential hazards and is well-positioned to take advantage of unexpected opportunities.
Prioritizing relationships with experts should start before an advisor makes a move. Joining professional organizations, building relationships through professional acquaintances, and seeking out successful educators and professionals are all great ways to find mentors.
Be Ready For Growth
Preparing for growth should start before the doors of a new financial advisory practice ever open. Choosing tools and technology that are scalable and that provide you with the flexibility to grow and take your practice in different directions as opportunity presents itself. Choosing a platform that will support a practice’s growth early in the process can ensure that advisors don’t have to change technological solutions as time goes on.
At Terrana Group, we’re experts in matching advisors with opportunities that support an advisor’s growth over time. Getting the right advice early in the process can ensure that a new financial advisory practice is well positioned for years or even decades to come.
Want to Keep the Conversation Going?
Thinking about making the leap to independence, but not sure what comes next? All of us at Terrana Group welcome the opportunity to consult with you to determine the right platform for you going forward — one that satisfies your long term objectives and is also best for your clients!
Over the course of more than 30 years, we have consulted on and closed thousands of professional placements for Advisors, nationwide, in most every major city throughout the United States, with client assets transferring exceeding $67 billion dollars. We have built deep relationships with the advisory world’s most sophisticated and notable firms — including Wall Street Brokerages, Regionals, Boutiques, Banks, Independent Broker Dealers, RIAs and Custodians. Our broad knowledge of those firms and the deals that are currently being offered will ensure that you are being presented with the right firm choice, platform, and the offer which is best for you.
Confidentiality, professionalism, and respect are protocol to our practices and beliefs; we handle each and every step of the placement process with complete communication, keeping you informed while making the process smoother from beginning to end.
We are proud to always be considered as a great asset by our clients because of our proven expertise, many years of knowledge, and acute attention to detail. Financial Advisor Recruiting Services are not all created equal; we guarantee that the TG experience for clients and candidates is always world class.
We are based in Chicago, with a nationwide reach. Let us know you are interested by contacting us today. To get the conversation started, email info@terranagroup.com or give us a call at 312.655.8380 today.
