Over the past two decades, the shift of financial advisors from the traditional employee channel (wirehouse & regional firms) to the independent channel has been significant. And it doesn’t appear to be slowing down. According to the J.D. Power 2022 U.S. Financial Advisor Satisfaction Study, 15% of advisors at wirehouse firms are now “at risk” of leaving their firms in the next two years.
But, year after year, many advisors who truly want to be independent won’t make the move. Why is that? Often, it’s because they do not want the administrative headaches associated with running their own business. Securing office space, managing staff, maintaining technology, bookkeeping, and compliance are all necessary and time-consuming aspects of an independent financial services business. In addition, the ever increasing regulatory and cybersecurity demands of the industry will likely expand these administrative responsibilities in the years ahead.
A solution to this dilemma is what I call “Supported Independence”. By affiliating with the right independent office, a financial advisor can maintain the autonomy to work with clients as they see fit and ownership of their book of business without having to take on the additional responsibilities of running their own business. It’s a turn-key solution that provides everything an advisor needs to manage their practice without having to deal with things that take them away from revenue-producing activities.
It may help to think of Supported Independence as “outsourcing” those tasks you do not want to take on (running an office, IT services, regulatory compliance, etc.). For example, advisors that work with our firm are provided with a fully furnished office, phone, printer/scanner, and computer. All of their IT needs (maintenance, cybersecurity, paperless data storage) are taken care of. While it has the look and feel of being an employee, each of our affiliated advisors maintains full autonomy to run their business as they see fit (within legal/regulatory guidelines) and retains full ownership of their client relationships.
If you have considered going independent but hesitated because the nonrevenue producing tasks of business ownership seem overwhelming, utilizing a Supported Independence type of relationship may be an appealing option to consider.
Contact: Ron Taylor, Managing Director (303-850-4867, email@example.com)