As the end of the year approaches, many of us use the opportunity to take stock, think about the future, and reassess our goals. For a lot of financial advisors, this means looking toward the horizon and thinking about the next frontiers in our careers. Luckily for advisors who are wondering what comes next, there has never been a better time to think about transitioning to a Registered Independent Advisor business model. RIAs are a fast growing sector of the industry, outpacing traditional wirehouses in growth. If you’re a breakaway broker who has decided to take the plunge, or are just wondering what to expect, we’ve compiled a list of ten steps to seamlessly transition your business.
Step 1: Know Where You Want To Be
The first question you should ask yourself when considering a transition is, “where do I want to be”? The answer might be more complicated than you think. Are you looking for more freedom? Higher pay? Greater flexibility for your clients? Understanding your motivations is an important driver for what you’ll do and how you’ll do it. It will also help you explain your transition to clients and potential clients who may be used to working with a larger firm and won’t understand what you’re bringing to the table as an independent advisor.
Step 2: Do Your Research
Researching your options early can help you create a path forward. Researching RIA custodial firms and what they can offer your business can help you to understand what to look for, and what’s realistic, in a strategic plan.
Understanding your employment agreements, and whether your firm participates in the Broker Protocol will also help you understand what your options are as you plan your move.
Step 3: Check Your Finances
Getting your finances in order before you move is essential. Most new firms should not expect to do much more than break even in the first year, so understanding your options regarding a line of credit, a business banking account, or a small business credit card can help you make the best decisions, especially early in your journey, can ensure that you have the funding and flexibility to get through a rocky first year.
Step 4: Get The Right Advice
Talk to others who have made the move, or to knowledgeable professionals who have advised others before. At Terrana Group, we have a long history of helping advisors on their journey to independence, and we can make sure you have the resources you need, even if you’re not yet ready to make the leap.
Step 5: Make A Plan
Setting SMART goals; that is, goals that are Specific, Measurable, Actionable, Relevant, and Time-bound, can help you work backward to the present and set up a plan that is designed to take you where you want to be. Your plan should have overall goals, and set sub-goals that will ensure you’re meeting your targets. Conventional wisdom suggests that most advisors can expect 60% to 90% of their current clients to move with them to an independent model. Review your current clients, and make sure you have a plan to stay in touch with them now, before you make the leap, so you can maximize the investment you’ve already made in your client base.
Step 6: Get Your Technological House In Order
Technology options for independent advisors have never been more robust. About half of independent advisors opt for all-in-one portfolio management tools that offer CRM functionality and/or integrate with commonly-used CRM platforms, cover the entire investment lifecycle, and integrate with other platforms.
Step 7: Choose An RIA Custodian
Many RIAs who need a custodian ultimately custody their assets at one or more of these six major firms: Charles Schwab, Fidelity Investments, TD Ameritrade, Pershing Advisor Solutions, LPL Financial and Raymond James. Examining the pros and cons of each of these custodian bank options will allow you to make the best choice for you and your clients.
Step 8: Get Your Business’s Look Right
Marketing for independent advisors is a critical part of making sure both existing and prospective clients feel comfortable entrusting your new business with their assets. Your business’s logo, website, and digital marketing materials should tell a story about your investment philosophy and target market. Consulting with professionals in the marketing space may seem like an up-front cost that your new practice can skip, but given the time it takes to effectively build a brand presence online, you have no time to waste. Small consulting firms can assist in the process of producing content and marketing materials that are engaging, SEO-friendly, and help you grow your reach and influence.
Step 9: Consult With A Professional Regarding Incorporation And Compliance
Getting a handle on the rules of the road for your new business can seem daunting. Consulting with a compliance professional can streamline that process for you. A compliance consultant can help you understand the insurance, licensing requirements, and business formation rules that will apply to you, and can prevent expensive headaches down the road.
Step 10: Make The Leap!
Once you’ve done the work, there’s nothing left to do but make the leap and enjoy your new independence! Managing your own RIA practice can be intimidating, but it can also bring tremendous rewards, both for you and for your clients.
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 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.
