Why independence matters:
Three key values for the independent modern RIA

There is no denying the gravitational pull of the RIA - the emergence of financial advice as the centerpiece of the business has transformed Wall Street and the industries that have emerged to service this new age. Advisors considering the advantages of going independent versus staying within the confines of a parent company need to understand the three key values to contemplate making the move.

You make your own decisions

As an independent advisor, you run the show at your practice. First and foremost, the work culture and environment will be more positive. Without a larger entity dictating what procedures you must follow or quotas you have to meet, you have more freedom to do what actually needs to get done. Independence allows you to break free of the confines of meaningless staff meetings or arbitrary processes that tend to slow you down. It also allows you the freedom to operate your firm virtually any way you’d like, governing what sorts of investments are implemented to achieve client objectives. Of course, you have a responsibility to your clients and the rules/regulations of the SEC that everyone has to follow, but otherwise you make the choices. Without upper management barking orders from the corner office you can be collaborative, innovative and build your practice with the values you hold to be true.


You’re invested in your own business success

Let’s face it, when you’re an entrepreneur and indie advisor, your success rides on you working diligently to build the business. As a hard worker who does right by their clients, being independent is generally more lucrative than working for another institution.

If you’re an employee at a firm and you generate an extra million in revenue for the year for them, the potential rewards are more one-off in nature. You are not building equity for yourself. As an employee, you will never be paid more than what a company thinks it takes to keep you in your seat, no matter how much value you generate for the firm. However, as an entrepreneur, you ultimately keep what you make and can typically become more profitable. Having that entrepreneurial spirit leads to more motivation to work for yourself, rather than just punching the clock from 9 to 5.

After building a practice for years, when it comes time to leave you’ve built up equity in the firm. With a quality succession plan in place you can retire and sell your firm for up to two to three times the annual revenue - a meaningful payoff for those years of diligent client service and hard work. But if you retire as an employee, you might get a piece of cake and a nice gold watch. In each scenario you’ve served clients, worked for decades on end, and helped countless individuals and families meet their financial goals -- but the end result for you can be incredibly different for you, financially.


Your clients are better off

At the end of the day, you’re in the business of serving your clients and their success will breed success for you. With an increasing emphasis on the importance of being a fiduciary, those you serve are actively seeking someone who is working in their best interest. As an independent, you can work with the client on their terms, without the need to support proprietary products or meet arbitrary quotas. You are free to invest the clients’ assets however you choose and are able to select the best of the best within the industry. It’s a virtuous cycle -- working in the client’s best interest generates their success, which in turn allows you to be successful.

If you’re interested in becoming an independent advisor as the industry continues to change, reach out to us. We’ll show you how we can support an independent practice with world class technology, compliance and marketing services to drive business to the next level.