Congratulations! You’ve decided to take the plunge and start a new journey as a breakaway advisor. This is an exciting time, but a busy one, with so many tasks ahead and decisions to make. It might seem complicated now, but you’re already well on your way to greater freedom and autonomy.
You’ve chosen a path forward, weighed all your options, and made the commitment to yourself to do all the hard work of creating your own new business as an RIA. What’s next? Where do you begin? Assuming you have researched your options with various independent broker-dealers, taken every precaution when it comes to compliance, and developed a communications strategy, you may be wondering what else to put on your checklist.
Research Your Existing Contract
It goes without saying that almost all advisors who take the leap, do so with the intention of maintaining their existing client base – in other words, expecting that their clients move their account over to the new firm. Before breaking the news and sending out open house invitations and account transfer forms, you’ll want to do a little investigating into your current firm’s rules and their customer privacy notice.
Most importantly, do they participate in the Broker Protocol? Established in 2004, the Broker Protocol is an agreement that many – though not all – financial services firms have committed to, which governs what client information a broker can take with them from one agency to the next. This includes the client’s name, address, phone number, email addresses, and account titles.
If your firm participates in the Broker Protocol, you’ll have a much easier time setting up your new shop and wooing your client base to join you in the adventure – although it will still take a good deal of your time, planning, and paperwork.
If, however, you are departing from a non-Broker Protocol firm, it becomes even more critical to have a crystal-clear understanding of what you can and cannot say to clients in announcing your departure. It may also be possible for your lawyer to negotiate a deal on your behalf that allows you to take some information with you. (If so, be sure to get it in writing prior to communicating with customers.)
Either way, an attorney who specializes in securities law can be an immense asset at this stage. If this part of the endeavor seems daunting, a transition consulting firm,Terrana Group can help by matching you with a firm that offers complete guidance in the client transition process.
Set Up Shop
Another consideration when starting a new business is choosing where the business will operate. It’s time to go office-scouting! For this task, you’ll want to consult with an experienced commercial broker who can review all of your options and help narrow down some locations that meet your preferences for square footage, part of town, and monthly cost.
You’ll want to walk through your top 3-4 spaces to see how they feel, check out the neighborhood, and meet with the property managers. Keep a close eye out for signs that may indicate whether or not the building and grounds are well-maintained. And remember that everything is negotiable, even the price tag.
But what if you don’t want to sign a lease? In today’s climate, working remotely from home has become much more acceptable, and it is entirely possible to forgo leasing a commercial property. Even if you (and your future team) intend to primarily commute from the dining room table, you might want to consider at least securing a co-working space. These have begun popping all over and can offer real value in a number of ways.
For starters, they typically offer flexible and affordable options, including dedicated offices, open shared spaces, meeting rooms that can be rented – all by the hour, week, or month. They also offer mailbox services you can use instead of sharing your home address or renting a PO Box. Other benefits include networking opportunities with fellow coworkers, and a location that may be more convenient for coffee and lunch meetings with clients and colleagues – especially if you choose one in the center of the locale’s business district.
Finally, as you begin to think about a move-in date, don’t forget about your office needs when it comes to furniture, technology, phone and internet services, and a coffee maker!
Staff Up
The platform or custodian you choose to partner with for your new business may offer varying degrees of transition assistance. Regardless, though, the burden of securing transfer documents from existing clients and processing them into the new agency’s structure will ultimately fall on your shoulders. It may be a lot to tackle on your own.
Once you’ve assessed what the platform can help with and what you’ll have to handle independently, it may be time to consider bringing on some help. You could seek out an experienced transition consultant for a concierge approach, or you might just need some administrative support from someone who is organized and reliable.
Consider whether you’ll want a permanent full-time assistant or simply some temporary part-time help to assist with the start-up process. If you have a trusted team at your current wirehouse, are they interested in coming with you and, if so, can you afford to match their salary and benefits?
When thinking about putting a team together, it’s important to consider all the tasks that will need to be attended to. Be honest about your professional strengths. Ideally, any staff you bring on will be able to fill in the gaps and handle tasks that come less easily to you, so you can focus on what you do best.
In summary, there’s a lot to consider and even more to do as you prepare to go independent and breakaway from the wirehouse. If it seems intimidating at first, the best thing you can do is make a list of tasks so you can check them off one by one. Before long, you’ll have joined the ranks of the thousands of other advisors who transitioned to RIA’s in recent years.
Want to Keep the Conversation Going?
Going independent is more complicated than ever, and the right partner can make all the difference. At Terrana Group, our experienced and knowledgeable professionals 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 nearly 30 years, we have helped facilitate thousands of professional placements for advisors, with client assets transferred exceeding $67 billion dollars. We have completed placements in most every major city throughout the United States, while building deep relationships with the advisory world’s most sophisticated and notable firms — including major Wall Street brokerages, most Regionals, Boutiques, Banks, Independent Broker Dealers, RIAs and Custodians. We have a broad knowledge of the deals that are currently being offered and will ensure that you are being presented with the offer which will be best for you.
Confidentiality, professionalism, and respect are essential 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.
