This is the final installment from the webinar transcript. What follows are comments from Kirk Hullet, executive vice president of strategy and practice management for Securities America.
Independence Comes with Lots of Options
“One of the great things about the independent channel is it’s not a one-size-fits-all model. Advisors have several options for their independent business. They could join a broker/dealer as a sole practitioner advisor, but many advisors coming from a captive model really benefit from joining a branch. That supported independence model can really help the advisor move to an independent business, while at the same time focus on the things they are really good at: working with clients, giving investment advice and providing financial planning services and advice. They can outsource the stuff they may not be interested in or may not be experienced at, which is all the business stuff, like picking out furniture, figuring out a phone line, and so on. And you have the great culture and camaraderie of being in a branch, with a branch manager who can be a coach and mentor through that whole process.
“If you already work in a group or run an ensemble, the whole group can affiliate with the independent broker/dealer as a new branch. In some cases, one member of that group becomes the OSJ or branch manager. If you are doing a lot of fee-based advisory business, you may want to consider a hybrid RIA model, which lets you conduct commission and fee-based business on one platform either with your own RIA or under the corporate RIA of a broker/dealer. And there are some advisors who opt to work in conjunction with a bank or credit union as either an employee of that institution and/or an independent contractor who serves the institutions customers. That independent model provides us a great flexibility for anyone moving from an employee to a captive advisor environment.
“Advisors need to first really dig deep and think through what do you want from this move? What kind of business do you want to own five or 10 years from now? John Lindsey talked about having a 10-year vision for his business. He knew where he wanted to be 10 years from now, and the independent model was his best way to get there. I think anyone considering a move to an independent model really needs to think through, what does my business need to look like? What do I want for myself? How do I like to work? What do I want to spend my time doing? Which model is going to allow me to do that? What sort of support am I going to need to get there? You want to make sure you are moving to something not just fleeing from something. This is a long-term play for your business. It’s going to require some short term work in setting up new systems, understanding new technologies, setting up new work flows, and talking to your clients. That all pays off in the long run. You need to think about what will be the best platform for growing after that transition is made.
“Your clients want to understand what you are doing. They want to hear the story of why you are making this move, and they want to hear it in terms of how it’s going to benefit you and allow you to serve them better. I think an important part of making that transition is having that story prepared to tell every one of your clients, because the clients trust you; they trust you to make investment advice, provide them to make financial decisions. They are going to trust you in how you can better serve them, but you have to communicate that effectively and tell that story well.”
I hope that having the entire webinar transcript has been helpful as you consider your options for going independent. Please Contact Me if you would like to discuss a possible transition away from your current firm. I’ve walked in your moccasins and would be happy to help you think things through.
Hope your New Year is going great,
John Lindsey, CFP®