As the financial advisory industry continues to evolve, more and more advisors are making the leap to independence as an RIA or independent broker-dealer by choosing a turn-key breakaway model.
It is true that breaking away from the wirehouse gives you more control over your business, but not everyone wants to be responsible for managing compliance, client billing, marketing, overhead costs, and all the stress of building a business from the ground up.
Turn-key independent models are growing increasingly popular since they offer the most support. According to Charles Schwab, the growth rate for RIAs since 2021 is a robust 47%, and more than 90% of those who have made the leap are happier and enjoy higher revenue.
Let’s take a closer look at turn-key models and explore how advisors can find the perfect situation to match their career objectives.
A Fundamental Fit
A turn-key independent model offers a complete solution for those who want to be free from the wirehouse but don’t want to handle every tiny administrative detail. They receive all the tools, resources, and support needed to set up an RIA, Hybr or Traditional Independent business in as few steps as possible. It’s a chance to “plug and play” and increase net revenue while lowering clients’ administrative fees.
Advisors in this space are better positioned to serve as fiduciaries, and there’s a rising demand for professionals who provide a more holistic approach than the impersonality of the wirehouses.
Moving to a turn-key RIA, Hybrid, or Traditional Independent platform solution also lets advisors find a company culture that closely aligns with their values. They have more control over business and investment strategies and can tailor services to meet the unique needs of clients, rather than being limited by the products and services offered by a wirehouse.
The first thing anyone considering taking the leap to independence needs to do is determine their goals, make a plan, and review their opportunities with a highly skilled and experienced consultant from Terrana Group to determine their ideal path. Overcoming the fear gap is crucial to finding the perfect fit.
Some of the most appealing features of a turn-key breakaway RIA model include:
→ Transition Assistance:
Advisors will receive expert transition guidance to help them navigate the process of leaving their current firms and setting up their own independent businesses. This includes everything from legal and financial advice to marketing and branding support to the transition dollars,“the deal” being offered as an incentive for the move.
→ Compliance Support:
One of the biggest challenges of starting an independent practice is navigating the complex regulatory landscape. A turn-key model furnishes compliance support for meeting all regulatory requirements and operating a business in a legally responsible manner. For example, LPL Financial’s options for RIAs include compliance and risk management solutions with its corporate RIA.
→ Cutting-edge Tech:
Turn-key models also bring an impressive and customizable tech stack that includes everything from AI-driven portfolio and investing tools to CRM systems. Turn-key asset management programs (TAMPs) can change the game for independent wealth managers.
→ High Payout Potential
Turn-key models in each category of RIAs, Hybrid, and even Traditional Independent Advisors set their own compensation structures by customizing their platform, controlling expenses, and gaining control over nearly every dollar they earn. At a wirehouse, advisors take home 30-50% of their total revenue, but any independent model will deliver a substantially higher payout and much higher net take home over any employee model.
Size matters, experienced independent advisors with higher assets under management can benefit even more from a group scale while being fiercely independent and able to do what’s best for their clients and their practice. The freedom and flexibility of the independent model results in greater agility and the ability to thrive in any environment.
Reach New Heights
Turn-key independent models prepare advisors with all the tools, resources, and support they need to launch their own practice quickly and efficiently. This means that the focus can be on building their book and serving their clients rather than spending time and resources on administrative tasks. Turn-key models also deliver access to a network of like-minded professionals that can be invaluable.
But it’s important to investigate and understand the reasons for making a move. At Terrana Group, we help advisors carefully evaluate their options and pair them with turn-key independent firms based on factors such as culture, reputation, services, technology, and support.
Not all turn-key models offer the same services. Some providers offer a basic package with compliance and technology support, while others have a comprehensive independence package with high-touch office administration, marketing, and business development.
Bring Your Vision to Life
Independent advisors can shape their legacy, gain equity in their business, and offer a uniquely high-value experience for their clients through the ideal turn-key breakaway model. It’s an exciting process, but it can also present a variety of challenges.
An experienced financial advisor recruiter is a critical resource for growth. For over 30 years, Terrana Group has helped industry professionals maximize their options and match with the most promising opportunities.
We’re the premier recruiting and consulting company for advisors and financial services organizations in the country. The future is bright for making the move to independence with a turn-key Independent model — reach out to us today to discover more!
